Possible Short Sale....1st and 2nd mortgage

I have a seller that owes about $164,000 total with 1st and 2nd mortgage.  The home is value is around 150,000 tops.  They have been unemployed but not behind on payments.   But have exhausted all of their savings and are living on unemployment checks that don't cover the monthly payments.  So we have an offer on the property for $170,000 with 3% seller concessions.  The first Mortgage is with BofA and the second is with CCO Mortgage.  

My question is.... with the offer there is enough money to pay BofA and realestate transaction fees,  but not enough to cover the second mortgage with CCO Mortgage. But they would get a decent chunk probably about $10,000 (out of $28K) after everything is paid on the transaction.  Is this is possibility for the short sale to get accepted?  I am fearful that the actual appraisal for the buyer might not even come to $170,000.  Then we would be renegotiating with the buyer to a lower price.

My clients haven't defaulted on their loans but they aren't working right now and chances are they won't be making payments next month.  

So basically I am short only transaction fees for the short sale, and a small amount for the loans.

What are the chances of this short sale happening? Also has anyone had anything like this?  Do I only negotiate with the second mortgage or will I need to negotiate with both?

Any help greatly appreciated!   

Patty Henry

P.S. I love this website!  I am new to this website page.

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Permalink Reply by Bryant Tutas on October 2, 2010 at 1:03pm
Patty. You only have to negotiate with the 2nd. The 1st is being paid in full so does not participate in the short sale at all. It sounds like a pretty straight forward deal. Get a letter of authorization over to the 2nd then call them and they will tell you what you need to do.
Permalink Reply by Patricia Henry on October 2, 2010 at 2:49pm
Ok I have been putting way to much thought into this and it hit me like a ton of bricks..So I can do that? I haven't had this situation before with a short sale. It would save me a huge amount of time not having to deal with BofA. I have the letter of authorization sent into CCO Mortgage. The home is Lake Front on one of the Great Lakes but in a depressed area but the home is newer, just not sure what the comps will bring because nothing has sold in 2 years. Going to be tough on the appraisal part. I feel so much better. The whole Equator website I haven't used and sounds like a nightmare. I happened to stumble onto this website by accident when looking for answers. Thanks so much!
Permalink Reply by Patricia Henry on December 16, 2010 at 12:44pm


HI Bryant!  I am just writing to let you know I closed this short sale out today!!!!  So wonderful.  We had a lot of bumps in the road but it had more to do with the buyer.  CCO Mortgage was great to work with, the only issue I had was they wouldn't pay seller concessions and my sellers couldn't pay it, so the buyer had to come up with his own closing cost and prepaids money.  So glad its over.  The first mortgage was Bank of America and they were paid in full. CCO Mortgage received 21K out of 29K that was owed.  So all in all it was a good day for everyone all the way around.

 

Thanks for your help!

 

Patty
Bryant Tutas said:

Patty. You only have to negotiate with the 2nd. The 1st is being paid in full so does not participate in the short sale at all. It sounds like a pretty straight forward deal. Get a letter of authorization over to the 2nd then call them and they will tell you what you need to do.

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