Client has a 1st with SPS ($240k original balance) and a 2nd with Chase ($60k original balance). The first approved a short sale for $180k which is the BPO valuation. There were 2 BPOs done and the same valuation was given for both. The Chase second was charged off but investors are wanting the full amount to supply a lien release. The buyers for the property have offered $3000 to Chase and this is a cash transaction. Any hope or anyone with any suggestions?

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No, the second was not sold to a debt collector. Chase has it and yes the first is a HAFA approved short sale.

Is the $8500 you mention some sort of magic number? No, 2nd doesn't participate in HAFA.

They were both with Chase at one time but the 1st was sold to SPS at the beginning of me getting this file. Chase was not named in the 1st foreclosure anywhere. The second was charged off and for the first 30 days I was dealing with the lien release department. Chase then closed the request for a lien release because Recovery wasn't answering their request for approval. At that point I was told that I had to deal with the short sale department. The file was moved to the escalation and I was told that they had numerous charged off seconds and "upper management" was trying to decide what to do with them all. Yesterday I was told that "upper management" is requiring a full payment. The buyers have offered to pay Chase $3000 but they would not even consider it. The property according to 2 BPO's is valued at $180,000. It is a very unique property to say the least and needs about $250k put into it. It was purchased for $300k -  $240/$60 = 100% LTV.

Sounds like there is information missing. Why would the 2nd be requesting a full pay off? Do they feel there is equity? Also, the transaction needs to be restructured likely as it seems the 1st did not approve any funds towards the 2nd lien?

You are correct, the first did not allocate any funds to the second. I know that it is strange that they are asking for the full payoff and I can't get an explanation as to why. There is NO equity in this property. The first is taking a $65k loss. I have contacted  Executive Office Resolution with a written request.

You may want to request from the 1st that they review a payoff towards the 2nd. The reason for this is that the 2nd lien is charged off and if they do settle for less, you likely will need assistance from the 1st lien in order to potentially make the settlement with the 2nd work. Have you opened a case with Chase Office Of the President or spoken to any upper level contacts in the recovery department?

I have not contacted the Office of the President just the Executive office # that is on the Chase information page from Short Sale Superstars. Do you have another contact #?

If the 2nd was charged off to Chase Recovery, it seems strange that they are requesting to be paid off in full. Did the 2nd complete a value on the property? Do they feel there is sufficient equity? We have seen from experience Chase Recovery request a larger payoff % than typically mortgage servicers, but to be paid off in full, it seems like there is an underlying issue here. Have you spoken to any upper level contacts to get to the bottom of why they will not settle?

If you need anything at all or have any questions, please don't hesitate to reach out to me.

[email protected]


I have the exact same situation.

2 liens with Chase, 1st transferred to SPS and 2nd (I was informed today) has been charged off.  they are close now, sO I will call them on Monday.

I will keep you updated.

HAFA requested to SPS as well.

Thank you!


I have requested the Chase Executive Office to review the file after I was told that they were requesting a full payoff. Keep me informed! Good Luck.

I am having the similar situation, however with another servicer, (servicing both) 2nd is in recovery department,

First Fannie offered $6k, Second counter wants $20k, pointed out  Requested an Override that first was Fannie that the max! Basically,

The second is rated "Balance in full Due", Don't care if forecloses, they will still pursue the debt. (needless to say, seller will not come out of pocket)

Any further suggestions/comments on this situation is appreciated. 

Fannie won't allow contributions to show on the Est. HUD to subordinate lien holders. At times, parties will need to step into the grey zone in order to get this done. How much is owed to the 2nd and who is the debt being serviced by? You can't get them to come down at all?

[email protected]




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