2 Mortgage Liens

How do I prepare the estimated HUD? Should I just show it as 1-line item or 2?

Views: 185

▶ Reply to This

Replies to This Discussion

Permalink Reply by Smitty on February 3, 2012 at 7:42am

In section 500 you have a NET payout to the first lienholder, and then usually a line above or below that line with what you are offering the second lien holder (typically 10% of what is owed).  (Unless you're me and you do separate HUDS for each lien holder, but I'm not going to get into that)

Permalink Reply by Gustavo on February 3, 2012 at 8:32am

Smitty is there a reason why you would do 2 Huds and not just one? Should I assume you had issues with a 2nd lien holder wanting more because they saw what the first one was getting? Just wondering for future reference.

 

Thank you

Permalink Reply by Smitty on February 3, 2012 at 9:55am

Yes there is a reason.  I do two because second lien holders are notorious for asking more than the traditional 10%.  So I literally tell the 2nd they are only getting about 5% of the note balance, and I HUD the first lien holder to show that they are to pay the second 20% or more.  Usually when one approves I have more negotiation leverage with the other.  Final HUDS are prepared by title attorneys or agents and they usually go off my figures.

Permalink Reply by Kristy Hamilton on February 3, 2012 at 10:54am

If I can get an approx. balance, I go about 5%.  If 5% is higher than $3K, I use $3K to the 2nd.  I look at the search for the orig. amt. of loan to try to gauge - say it was originally $100K, 5 years ago, I will put $20K on the HUD to the 1st, but would put $3K on the HUD to the 2nd.  We are a real estate law firm, so I prepare my own HUDs for negotiations and have learned through trial and error what costs can and will go where.  I always ask for the name of the investor to assist early in the process before any HUD goes to the lender to begin negotiations.  It is always nice to surprise someone in a GOOD way. ; )

Permalink Reply by Loreena Yeo on February 6, 2012 at 3:56am

I see your point here. Thanks for sharing your thoughts.

Permalink Reply by Eric Mieles on February 5, 2012 at 3:54am
Two Huds is the way to go. Smitty is spot on.
Permalink Reply by Bryant Tutas on February 5, 2012 at 4:58am

Totally disagree. I've never used 2 HUDs and have never had an issue getting agreements from the lenders involved. but hey...I can sell ice to an Eskimo too :)

Permalink Reply by Smitty on February 5, 2012 at 4:04pm

Bryant, I just scored big with doing this.  Literally had WF want $172,000 NET on a HUD and I originally offered them $164000 net.  HSBC second position.  I offered them $8000 of a $130000 note.  They originally approved $13000 (second lien position)  second time around approved $8000.  WF was ok to pay out $12500 to HSBC, but now, I got them $5000 extra, PLUS I found $3000 from taxes that weren't due we originally thought were.  WF kept cutting commission to 5% but because of the extra I got from HSBC from doing the two HUDS,  my Realtors got their full 6%...no need to cut.

Works great.  Not every time, but when it does, it's well worth the attempt.

Permalink Reply by Joseph Alfe on February 5, 2012 at 7:06pm

I only use two HUD's on deals with large HELOC 2nds, and NEVER on a Freddie deal, unless you want a friendly visit from their fraud investigators.

Permalink Reply by Smitty on February 6, 2012 at 2:53am

Joseph, please don't tout the "fraud" card here.  I've already explained, all my huds are prelim.(only if I don't have time to wait due to an auction, will I submit a prelim HUD without attorney reveiw)  ALL my final HUDS are either done by title co or attorney. 

Two HUDS is a strategy for me to poke the lenders to get an idea of what they'll bite at for a NET.

Permalink Reply by Joseph Alfe on February 6, 2012 at 5:52am

Smitty, trust me on this.  Freddie is getting very aggressive.  You and I know there is nothing inherently wrong with the practice, but that matters little to Freddie. Remember, they are the ones who publicly said that all forms on investing on short sales were fraud and that they would follow up.  makes no sense, but then again it's Freddie.

Permalink Reply by Smitty on February 6, 2012 at 6:38am

Joseph, Freddie feeding fraud to panic the public is as common as me putting on a pair of pants on every day, but I'm not concerned in the least.  You and I both know it's the FINAL HUD that needs to be accurate.  You don't think servicers and Freddie/Fannie are aware that the initial HUDS are not final numbers?  Of course not.  We work to try, to get those number accurate throughout the process, and my strategy allows me to have a higher percentage of approvals.  Fraud isn't even remotely part of the equation as I don't prepare the Final Huds. 

RSS

Members

© 2024   Created by Short Sale Superstars LLC.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************