NYCB issues with deficiency

I'm working on a 2nd lien approval with NYCB (formerly Amtrust) in Ohio.  I had an approval from Jan 2012 that was waiving the deficiency for the borrower.  Buyer walked 2 days before closing and we had to put the property back on the market.

Have a new buyer, 1st lien approved and now the 2nd (NYCB) is approving the short sale with the right to pursue the deficiency.  Saying they will not waive the deficiency this time as their policy has changed.

They also won't try to work out an agreement before closing to waive the right to the deficiency because "the 1st being FNMA, doesn't allow us to take any funds at closing."  Have not heard that one before.

In any case, has anyone had a similar experience with NYCB and been able to get them to waive deficiency in the end?  Your thoughts are much appreciated.

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Permalink Reply by Bryant Tutas on May 5, 2012 at 11:38pm

Albert. I have never worked with this particular lender before. But maybe the borrower can offer them some cash at closing? I've done FNMA deals where the borrower made a cash contribution to the 2nd. I'm not aware of FNMA having an issue with this. If so then maybe the buyer can make the contribution. Also, if it's a cash deal then RESPA does not apply. That can open up some opportunities too.

Permalink Reply by JD Dugger on May 6, 2012 at 3:40am

I have not personally worked with that specific bank.  I would find out what guidelines they are approving the short sale under.  For example in some approval letters with Flagstar it states the same thing.  They do not waive the right to pursue them in the future.  Then when you ask for the welcome letter or a copy of the short sale guidelines regarding the deficiency.  The guidelines your approval letter falls under will over rule the approval letter.  They state full release of the lien and the debt.  Definitely something to look into.  I would recommend asking for a copy of the procedures and guidelines for remaining deficiencies.  It might give you that break you need to move forward or it might not. I would suggest once you have received these to send them to an attorney to look over.  Our company runs everything threw an attorney we have on retainer.  This way we know exactly what decision we are making on behalf of our client.  Hope this helps...  What state are you in?  One big thing I would like to bring up to be safe is.  Check your state procedures and guidelines for short sales and Realtors.  In a lot of states Realtors need to be aware that they can not routinely do short sales without a DM# and they can not negotiate short sales with extra attached debt to the home.  Credit cards, judgements, garnishments, child support and so on....  They are in violation and could possibly be subject to a fine, law suit by home owner, and loose there license to practice Real Estate.  This is something that depending on what state you live in they are looking at very closely now...   Please make all Realtors you know aware of this. 

Permalink Reply by Albert Clark on May 6, 2012 at 4:28am

Thanks for the replies.  I hadn't heard anything on my previous short sales about not being able to complete a work out. Sounded strange to me.  I will check into getting the guidelines of the approval and deficiency. 

I know my clients would prefer to work out a solution cash/prom note now instead of after the fact, so it was really surprising when the lender said they wouldn't do anything before closing.

I am in WA state.

Permalink Reply by Anna-Lise Troup on November 12, 2012 at 11:36am

Hello Albert,

Congrats on getting a 2nd lien approval from NYCB! I currently have a ss package submitted to them and I'm getting no where. Do you have any management contacts or suggestions for getting the file moving forward?  Negotiator Kathleen Flynn was assigned to the file on Aug 30.  We received demand letter and short sale approval from Wells Fargo. They are offering to pay 20% of outstanding 2nd lien balance to NYCB. We need 2nd lien approval within the next 10 days or we won't make the close date stated on WF approval.  I've asked to be connected to a manager when I call their short sale dept but they won't do it. Argh.  No formal escalation process. Any help would be appreciated!!

 

Best Regards,

Anna-Lise

 

Best Regards,

Anna-Lise

Permalink Reply by Albert Clark on November 12, 2012 at 2:26pm

Paula Mayor: 216.588.4522  [email protected]  (She approved my short sale)

Malikie Richardson: 216.588.4100 [email protected]  (Paula’s supervisor)

I'd try Malikie first.  if you get their voicemail, hit 0 and then go to operator and ask for them by name.

Permalink Reply by Anna-Lise Troup on November 13, 2012 at 5:23am

Thank you very much, Albert!  I am also submitting a request for help to the Fannie Mae Short Sale Assistance help desk. 

Best Regards,

Anna-Lise

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