I have been working on a short sale with wells for the last 7 months. At first the BPO came in for almost 500k and our contract is for 455k. I successfully challenged the BPO based on realistic values and the property being in a distressed market area, the east new york section of brooklyn which has the highest foreclosure rate in nyc. However, wells is insisting that freddie mac is requesting either 50k at closing or a 100k note from borrower. The borrower lost everything, this is a 3 unit property and from day one he had problem tenants and several evictions already which in nyc can take up to 6 months to remove a tenant. This was a new development of 6 houses and wells has the mortgages on all the properties and each one of them is in foreclosure.

The borrower went from making over 100k when he bought the home to making 16k a year which is basically the poverty level. Despite this fact they are insisting on the borrower participating in the loss. I went as far as contacting freddie mac directly only to be told that wells is delegated in this matter, however wells is insisting its the investor requiring this.

Has anyone had success eliminating the request for a note? This is truly a hardship case and they dont seem willing to work this out. We even offered them a 10k cash contribution at closing which the seller would have borrowed from family members but that was rejected as well. The seller cant afford to pay over 800 a month, he barely makes that and doesnt want to just sign a note that he will never be able to make good on. Any advice is well appreciated.

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This is a great "Last measure" tactic.  Sometimes to take two steps forward, you need to take one step back.

I think this might be the best option on this deal. I am going to re-submit the deal in about a week and hopefully get a better negotiator.

There is a Richard there. No David, but I left a message. Thank you.

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