Double Closing a Short Sale

[Janos Sztojka]

Double Closing a Short Sale

Of course I need to start by admitting that I am not an attorney even though I did almost go to school to become one. Because I am not an attorney I am not giving legal advice and urge you to get your advice from someone qualified. This article is only based on my understanding after reviewing the Colorado Foreclosure Protection Act and the advice I've received from my legal advisors.
There is an amendment to the Colorado Foreclosure Protection Act (CFPA) that specifically addresses the short sale flip. A short sale flip is when a buyer of a property, through a short sale, re-sells the house to another purchaser for a profit. This is normally done with no work being done to the property and is actually not a bad strategy at all. If you can add enough value by discounting a payoff then you should be compensated. Many times the end buyer is another investor but more often it will be a homeowner. The problem with this strategy is that the bank that is taking the loss hates it.