As expected, Wells Fargo has followed suit with Bank of America and has put out a new Short Sale Affidavit (attached hereto). Similar to the agreements recently published by Bank of America, Wells Fargo appears to be getting more aggressive in trying to curb flips and low offers and is now requiring realtors and closing agents to join in the execution of the instrument.
The Affidavit contains traditional arms length language, but extends the traditional arm’s length representations to now include representations that there are no other or pending contracts. In fact, the Affidavit takes it one step further and forces the parties to agree that they do not even have knowledge of a higher offer for the property. This could be particularly troublesome, as it would seemingly eliminate opportunities to accept lower, but stronger offers.
The Affidavit also requires the Buyer to confirm, under penalty of perjury, that they will not sell the property within 90 days, and that they will not rent the property back to the Seller at any time after closing.
The Affidavit goes on to state that there could be civil and criminal (emphasis added) liability for any misrepresentation. Since all parties to the transaction, including realtors and closing agents, will be expected to sign this Affidavit, we again strongly encourage you to seek the advice of counsel before taking on a Wells Fargo short sale.