Is it legal to do a short sale on a house not in foreclosure and then lease it back to the owner?
Rating: +1
Sure it’s legal, I don’t see why not. The real question is why would a lender do a short sale on a home not in foreclosure?
They won’t is the answer there. Short sales are for loans in jeopardy…where the lender is at risk. A loan not in foreclosure is a loan NOT at risk.
The second part of your question about leasing it back to the former owner. Assuming you could buy the property via short sale, you now own it. You can lease it to anybody you want. The former owner, a relative, or little green men from Mars.
The question once again is leasing it back to former owner a “good idea”.
Probably not. Here’s why…
The former owner will get “buyers’ remorse” after paying rent for a house he used to own and stop paying. It’s just human nature. Always best in these cases to start fresh with a new tenant that has no history with the house.
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