Comment

Comment by Ben Benita on April 17, 2010 at 12:45am

Carol, a BIG congratuatlion on your short sale, 3 liens is a BIG pain in the _____ to get negotiated down.
One note - we often send 2 different HUD's in to first and second liens with our short sale packet:
THe HUD to the first lien holder will show the second lien getting at least 20% of the balance with notes such as:
"The second needs $XXX (where $xxx is 20% of the balance) to release"

THe HUD we send to the second lien holder has $1000, or $2000 with notes:
"First will only pay you $1000 or $2000 to release"

and we negotiatie from there....remember, these guys are called "negotiators" for a reason, leave yourself some room to play/negotiate.

As far as a second getting zero at foreclosure, not true if there is mortgage insurance and why you must ALWAYS find out if MI exists....it totally changes the game.
Great point Carol made, and I ALWAYS agree with:
"TELL THE BANKS NO DEAL"

......the Servicers WILL tell you things that are not true. Again, it is their JOB to get as much cash as possible for their investor. Push back ALWAYS, do it for yourself (on commissions) and for your Seller (prom. notes, deficiency liens, cash at closing, etc.)

Comment by Carol Pease on April 16, 2010 at 5:48pm

Forth:
I just closed one today with a 1st, 2nd and 3rd, all previously discharged in bankruptcy. The 3rd settled for 0, the 2nd got 10%. You need to make sure you are talking to someone in the inactive bankruptcy department at Citi. On my transaction, we were given inaccurate information to start just as you were and our first go around we offered the 2nd nothing. That didn't fly. After a month of getting nowhere I finally landed in the right department which was actually only 1 person. Your client is no longer responsible for the note, but the lien still exists on the property. The first will normally allow you 10% to help settle the 2nd. Give a revised HUD to the first with 10% of the balance on it and get a revised letter. Go back to the 2nd and tell them this is what the 1st will pay them. Be prepared for a wild ride right up til closing. I didn't know until 24 hours before closing that I had a successful transaction. They will yell and scream and then try to dip into your pocket, the seller's and the buyer's. You will also be told that the investor won't even look at it unless you have at least X dollars. Hold your ground. I did and I was paid a full commission. If you have any questions, let me know. I learned a lot on this transaction. The bottom line is that if the 2nd doesn't settle they will get nothing in foreclosure.

Comment by Forth Hoyt on April 16, 2010 at 5:10pm

I completely understand that... I just don't understand while they gave us the run around for 2 months and tolds us lies and now they want us to start all over again. Par for the course....
Hope you all have a great weekend....

Comment by Forth Hoyt on April 16, 2010 at 4:43pm

Just to clarify... the 1st was included in the BK. Her attorney is telling her that the 2nd was included in the BK and she is no longer responsible. Some of the people at Citi agree with that, we were told they were mailing the homeowner the lein release and she would have to file it herself. We were told that by several people at Citi several times. So we proceeded with the escrow since we had the approval letter from the 1st. The next call , I got a a really nasty lady that said she is the negoiator for this file and she is saying there is no way they will release the lein. Now we are stumped, I asked her how much they would take to release the lein and her response was, "How much are you offering?" ugh!! Buyer has done inspections, appraisal etc.... all because they kept telling us they were sending the lein... (yes, I know, dumb on our part...) Any advice would be appreciated... thanks

Comment by Ben Benita on April 16, 2010 at 3:41pm

I think she will need to re-afirm on her second in order for her to release, I would check with a local BK attorney. As far as giving the second some cash to release, that is true 99.9% of the time.

PLEASE keep us all in the loop on this, curious to see if someone in a BK can include a second lien but not a first?
I am going to ask the BK attorney we refer persons to here in Virginia.

Comment by Forth Hoyt on April 16, 2010 at 3:02pm

I'll get this in the right place.... I swear.... Sorry, originally posted in wrong group...

I have a super hard short sale in the state of CA. The first is with Chase the 2nd is with Citi. I do have an approval from the first. The seller was able to roll the 2nd into her BK so she is not responsible financially to the 2nd. However Citi will not release the lien without some sort of payment. Has anyone had to give a recovery department a payoff to release a lien with a zero balance? At this point I feel like we are being bribed by Citi's recovery department.

Comment by Ben Benita on April 9, 2010 at 11:54am

I am fairly certain the Servicer can not legally tell the owner to miss payments, there could be consequences as with:

http://news.yahoo.com/s/huffpost/20100406/cm_huffpost/527031

I know agents I speak with and teach say they are NEVER allowed to tell clients to skip payments or even suggest same for fear of losing their license.

That is why I would do my best to have them shoot you something in writing.

Comment by Cindy Jones on April 9, 2010 at 10:54am

I'm pushing and have asked them to send me or show me where this 30 day rule is. I work with a lot of military as well and we wouldn't even be in this mess if they had bought there house 26 days earlier. Then it would have been a HAP sale and we would be almost ready to close!

Comment by Bryant Tutas on April 9, 2010 at 10:39am

Cindy. I am not aware of any 30 day late requirement with Fannie. FHA has a 30 day late at time of closing requirement but that is the only one I am aware of. HAFA rules state that you either have to be late or being late is imminent. Maybe this is what they are referring to?

I would certainly push the issue. Credit is very important when you are in the military. I haven;t done any military short sales but I believe there are programs available to protect our military personel form crap like this. Pop Wendy an email. She deals with military all the time and may have a solution for you.

Comment by Cindy Jones on April 9, 2010 at 10:27am

Actually it seemed to me that the folks I've talked to at Citi thought this was wrong but that it was a requirement of the investor ie Fannie Mae that the homeowner be 30 days late. Citi was ready to process and even the supervisor checked and said it was a "new" requirement from Fannie Mae. The homeowner was already denied a loan modification. Any other ideas? Or do we just keep beating up Citi?

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