Owners stopped paying on second loan. What to do?
I have two separate clients who met with someone for help with their mortgages. Both have two loans on their homes. The person, who was supposedly an authority on loan modifications, etc, told them both that they could just stop paying on their second loans, so they did. One has now gone to collections and the other is nearing the same result. What can I do to help? How would a short sale work if we decided to go forward with it? Can they do anything else?
Replies to This Discussion
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Permalink Reply by Wendy Rulnick on
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Cici - I believe stopping payment on junior liens is problematic, as you say, the loans can get sent to collections. Collection agencies are normally not as lenient with short sale approval terms as the original lienholder is. You can still do a short sale. Just prepare your sellers that they may have to come up with a higher cash contribution sometimes with a promissory note to satisfy the junior lien.
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Permalink Reply by Cici Glaser on
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Rose, Thank you so much. That's helpful information.
Cici
cite>Rose Alarcon said:Cici
I have worked with a collection agency on a short sale. At first they are not negotiable. You have to try to work with the superior. Offer as low as possible then go up. I negotiated one from 18,000 and ended up paying them 2000.
Just keep trying it is possible.
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Rose and Wendy,
Thanks so much for responding. Your information is very helpful. You give me hope!
Cici
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