You guys are the experts but this is not just some crazy idea I invented.  It is happening all across the country  with no legal issues.  This arrangement is FULLY disclosed to the lender approving the Short Sale and to the End Buyer.  Most lenders are giving their blessing to it.  Some do not allow it but on the grounds that they don't want the property flipped immediately...not that it is shady.  I literally haven't heard of anyone questioning the legality of this type of transaction until ou guys.

Google "transactional funding" and you'll see this has become pretty mainstream in the past several months.  There is some particularly good info on www.oldschooltitle.com

I am just  trying to understand your real concern.  Obviously, like our mamas said..."just because everyone is doing it, doesn't make it right"  So I want to make sure I understand you.

This is very definitely not the C money funding the A-B transaction.  It is 2 transactions.  The C is funded by a mortgage from a diff lender (who knows about the trans funding too), so exactly why does it seem scary?  Is it just lack of experience at this particualr thing or something specific?

Again, I am not in the title business but rescinding a previous transaction doesn't seem that crazy.  I have heard of it happening.  B of A approves short sales with the caveat that you can't flip it within 30 days.  If you do they go back and rescind the previous transaction.....up to 30 days earlier!  If that is no problem then 1 day can't be a major thing, no?

Thanks