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Category: Need Advice Current Grade: A Total Views: 550 Member Comments: 4 |
Posted on: 08/29/2007 Posted by: cbfis1 Blog Points: 13 View all blogs >> |
Usually, I have found that the second position mortgage company is unwilling to release their lien in order for me to short sale the first. More often than not, the first position company will not entertain the short sale while the second position exists. I do have a strategy that works at times but is extremely difficult to pull off. Any ideas out there for how to deal with the "second position lienholder" wrench in the gears?
CB
Thanks Brian,
I'll be submitting my next package soon. Just awaiting some final docs. I 'll see how I make out. I know with GMAC and a few others, they will not negotiate without the second actually releasing their lien. They said "point blank", that they wanted all proceeds to go to them.
This one I'll be submitting within the next few weeks; both mortgages have been transferred to the same company. I'm not too sure how to approach that. They claim that they'll do both together but who knows what tangled web they'll weave.
Thanks again.
CB
I have not encountered this problem yet. I have found that second mortgages are always willing to negotiate. When we submit our short sale packages we send the same hud to both the first and second mortgage companies. We always start by offering the second mortgage company 10% of what they're owed. This is the standard amount they take, however all banks may be different. We start at 10% and work from there. Sometimes, the first mortgage will only allow a second mortgage to receive a certain amount, say a thousand dollars, if this happens then ask them for a letter stating this that you can provide to the second mortgage company.
Brian
The only reason I can think of, is stupidity? So often, the first will not negotiate until the second releases the lien. Even if the second discounts, the first doesn't want to hear it because they want all the money they can get. My argument to the second is that they will lose for sure if the first forecloses. They just don't seem to care. Perhaps the second lienholder is first in line after foreclosure?? They then, in consideration of the money they have invested, get the property from the first for "short" money hmmmm.
The only cases that work are those where the second is a private hard money investor. Usually, they'll negotiate with me or allow me to negotiate the first for them so they buy the property. It is possible that this is what happens in the above scenario. At least, when dealing with a "private" investor, I get paid for the short sale.
Thanks for your comment. I'll let you know what I find out.
CB