From the SS negotiator, something sounds off: Want your guys opinion please.

Sorry this might be long, but I wanted all the details here.
Also I negotiate short sales and have dealt with some other shady/shyster negotiating "firms", so maybe my "hinky" radar is a little over sensitive.

I am the buyer's agent
Negotiator is the title co.
Sale price $135k. FHA
Seller, 1st mtg-HSBC, investor unknown. 2nd-Chase, investor unknown
Under contract December 2012
NOTE: NO Buyer concessions or Repair credits in contract
2nd mtg $25k

Yesterday, 03-29-13 email from selling agent/negotiator
"1st mtg only allowing $2,000 which is 10% to 2nd. But 2nd wants 20% ($5,000) so we are $3,000 short. Seller has no money, buyer needs to pay".
Okay, so $2k is really 8%.
I asked for prelim HUD and Approval letter. They were immediately sent over.

Approval letter from HSBC, 1st mtg- dated 02-26 (1 month ago)
No sales price
Minimum net $115,000
Buyer concession $2,100
Repairs $0 printed, $1,266 hand written by someone
$0 to junior lien holders!

Prelim HUD received
No date. Purchase price $135k
No Buyer concession on HUD, ($2,100 in Approval letter)
$1,266 (repair amount) to 2nd mtg
Buyers per paid's, sec. 800/900 shown as $0, POC
No negotiation/atty fees, a few hundred dollars extra for normal fees
NET TO 1st mtg $ 121,000. ($6,000 above approval letter required net)

Upon questioning by email, negotiator responds "1st mtg allows only 10% to 2nd to come out of proceeds, period, regardless of net"

My response: Extremely rare for 1st mtg to offer $0 to 2nd. Was 1st aware of 2nd when originally submitted.
my suggestion is,


1) Resubmit to 1st with $2,500 going to 2nd, $2,500 buyer concession/repair credit, which buyer will contribute to 2nd-problem solved, 1st nets $118k.
2) We drop the price $6,000, buyer kicks in $3,000 to 2nd, 1st mtg nets $115k

Okay guys; Thoughts, observations, ideas? Thanks

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Wayne,

           If the approval letter shows nothing to the 2nd, I'd agree that it seems they may never have had a release to the 2nd on the est HUD. I'd resubmit for an updated est HUD with a release to the 2nd. I feel that it'd go smoother than dropping the purchase price.

[email protected]

www.ishortsalenow.com

310-564-6389

Thanks Brett, my guess was the prelim HUD didn't ask for a contribution to the second, like they forgot it.  Also, we just now get the actual demand from the 2nd, 30 days after the approval letter from the first?And, credits in the approval letter, that weren't in the purchase contract?

It seems there is a disconnect between the prelim HUD and senior approval letter. I'd go by the letter, asking why something was hand-written in (odd).  If your buyer didn't want a credit, apply to net. The net is the key to all.

Yes Wendy, that's generally my thought.  But right now the HUD shows a net of $6,000 above the required net, and they can't pay the 2nd anything?  The Buyer concession and repair credit in the approval letter concerned me, since I've never gotten something paid for that I didn't have an addendum or some back up for.  I know some other negotiators "magically" get 3% buyer concessions that were never in the purchase agreement, which get reverted to their fee.

 If the trustee is surrendering the property why would they appoint a new agent ? 

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