Question: Can A Trust Buy A Short Sale?

At times we have had buyers ask us if a Trust can be the buyer of a property via a short sale. From our experience, the answer to the question; Can a Trust buy a short sale? Is no, generally a trust cannot be the purchaser. From what we have been told, by mortgage servicers, is that it is due to preventing potential arms length guidelines from being violated. A trust can be a complex document and it could very well hide interest in the entity for an individual who is not allowed to purchase the property who would otherwise fall outside of the arms length guidelines. A party would be recommend to purchase a property under their name(s) as an individual or another entity such as a LLC, LP, etc. In those entity’s it is often more clear who has interest in them as they will require the necessary articles and operating agreements showing all members interests.

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