Keller Williams Realty Atlanta – Peachtree Road
Atlanta Homes For Sale – Atlanta Real Estate News - Atlanta Home Buyers
Real Estate Legal Tip
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Restrictions on Resales contained in Deeds and Short Sale Approval Letters
When FNMA (Federal National Mortgage Association or Fannie Mae) is the seller of a property, there may be a restriction against a quick resale or refinance of the property. This restriction would be found in the sales contract addendum and in the Limited Warranty Deed and usually prohibits the new owner from selling or refinancing the property for 30-60-90 days (usually 90 – seller fills in) after closing for more than 120-125% of the original purchase price from FNMA.
This restriction must be in the sales contract (pay attention to the Addendum to Contract/Counteroffer) in order to be included in the Limited Warranty Deed, and it is the seller’s/listing agent’s responsibility to add this language if desired.
Another restriction upon a quick resale (usually 30 days) appears in many short sale approval letters, and the lender may reserve the right to revoke and rescind the short sale approval if the new owner ignores this restriction. This would create a huge problem and title issue for both the seller and the new owner, and title insurance may not protect the new owner who violates this restriction.
Presented by Leigh Clack, Attorney leigh.clack@neelandrobinson.com
Neel & Robinson Attorneys at Law, LLC 404-705-3690 fax 404-459-0704
5555 Glenridge Connector, Suite 400, Atlanta, GA 30342
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