Replies to This Discussion

Permalink Reply by carol diaz on August 25, 2010 at 9:43am

No.

Permalink Reply by Jennifer Culberson on August 25, 2010 at 12:44pm

I would like to have someone explain to me this about MI...why is it Mortgage INSURANCE can come after a seller...isn't the whole point of "INSURANCE" to cover the default? To me it is like buying car insurance, getting in a crash and then the insurance company comes back and charges you for the damage....can anyone please explain this phenomenon?

Permalink Reply by Jean Beymer on August 26, 2010 at 11:12am

We played hardball and they closed the account. I had to reinstate the file. I went ahead and called the MI company direct and have negotiated a settlement. Now waiting for BofA to work through the equator system again. Don't know if we will ever get to closing...so far buyer is hanging in with us.

We were able to stretch out the terms of the note to 30 years, zero interest and payments of $38per month. We were also able to get a 50% discount for cash at anytime as long as the borrower stays current on the payments. That made it worth it to the seller to go forward with the short sale and not foreclosure. (We are in a no deficiency state so the borrower (seller) could simply let it go to foreclosure and not have to worry about repayment.)

Note: BofA had already countered and seemed to approve the short sale then they came back with the additional requirements from the MI company. Make sure you find out right up front if there is MI and who the company is.

Permalink Reply by Aneetra Isis Sherrell on August 27, 2010 at 10:11am

You can also go back to them and counter. Depending upon your seller(s) hardship, they will waive it. I was told by a B of A negotiator that they are now required to ask for promissory or cash conrtibution on every deal. They are fishing to see if they can get something more. They did this 3x and all 3x I got them to waive ut by sending a revised hardship so they would know the seller has no money.

Most of the time they deny it is because of the financials that were sent in. I suggest you revisit them because there may be a surplus or assets that they see and think your clients can afford it.

They may have seen the cd of $5k somewhere on a bank/financial statement?

Permalink Reply by joe beauchamp on August 31, 2010 at 5:15am

First off, make sure your seller has taken the time to put in the right info. I find many just go through the motions. I now ask them to look at the finances again and also include liabilities. I find sellers who forgot that they are paying $1K/mo to taxes, etc. I ask about liabilities because BofA does not. I want to show that $60K is owed to Discovery, etc. I can usually get everything dropped or get a low request after pointing out the bad info. It is a lot harder than having it correct initially. Then you get a new negotiator or MI person and they seem incapable of reading what is in the library and come back with the same stupid requests - hence, I now take the time to beat the sellers into giving me the right numbers. Same for the hardship. These are actually looked at by MI.
I had a seller, "my girlfriend left" Yeah, whoopee, and did your kitty cat run away, too? Oh, well, actually, it was his ex-wife who had screwed up finances so only he signed for the house. On top of that she had $85K/yr income. On top of that, when she left, she left him with an unknown $30K debt. Now, which do you think tells the MI that this guy has less ability to pay, "my girlfriend left" or the latter? Yes, they read these.

From your short message, it doesn't seem that you have explored that the MI is looking at bad data from the seller. If your seller, on the other hand, shows a credit report of him making payments (or he is making payments for the house now), MI will think he can keep paying....them... So, it depends.

Now, besides by being lucky with the right rep, how do you get the MI contact info from these BofA pinheads?

Permalink Reply by Gilda Ignacio PA, CDPE, REO on October 6, 2010 at 4:22am

If you already contacted the MI company and they don't reduce this amount, just tell your seller to accept it. This is better than a foreclosure. MI companies have to pay a claim if you short sale or properties forcloses, this mean either now or later... Dont loose a deal over 14K ..just educate your client about this note vs a foreclosure.

Permalink Reply by Wendy Smith on October 6, 2010 at 7:38am

It is not uncommon for a MI company to include a discount on the prom note if paid off early - for instance, I had a seller that agreed to a $30k prom note but was able to pay it off: $15,000 spread over 3 months. The discount for early pay off has nothing to do with the transaction, it is between the seller & the MI company...only.



Gilda Ignacio PA, CDPE, REO said:

If you already contacted the MI company and they don't reduce this amount, just tell your seller to accept it. This is better than a foreclosure. MI companies have to pay a claim if you short sale or properties forcloses, this mean either now or later... Dont loose a deal over 14K ..just educate your client about this note vs a foreclosure.

Permalink Reply by William C. Black on September 28, 2011 at 9:29am

There is a lot of UNKNOWN legal issues pertaining to the rights of insurance company requesting monies prior to intitiating a claim. It looks like everyone assumes the MI company has the right to request a note or monies prior to a claim being initiated.... doesn't this seem worthy enough to have legal council review the insurance claim. I see an agent recommending to sign a note or pay the MI company in order to "save" them from a foreclsoure but in non-judicial states they would have been better off allowing a foreclosure as they would no longer have a debt.

If you are giving legal advice by telling a client that they must accept the MI companies request or go to foreclosure I would make sure you have stronlgy protected yourself by stating you are NOT an ATTORNEY and they should seek the advice of an attorney. There are legal issues that near broke MI companies are attmepting to do as well as servicers. If you allow it to occur they continue it and it becomes a profit center for them and a norm. You must understand that most mortgages and servicers are "endorsed" to put MI in place and they have a guide to follow. They very seldomly "go" to the MI company but to the internal MI department that follows the rules of that specific MI company. Radian for example allows servicvers to use proceeds of claim for a loan modifcation and are instructed to follow HAFA/HAMP and if needed use up to $15,000 to modify. I have never heard them offer this-... once again servicer do what is right and profitable for them and screw everyone else. If you are not FULLY aware of the Mortgage Insurance claims/terms/conditions I wouldnt say you would be competent to be negotiating an existing contract as well as giving advice to the homeowner. Be careful- I know a few attorneys that have a business plan in place for 2012 to sue every Realtor they can that did short sales!    

 

I have attached Radians information to get a feel of how the MI companies work with the servicers but you didn't get it from me!   

Attachments:

• radianMIinfo.pdf, 1.1 MB

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