Please help me in clarifying how much Freddie Mac will contribute to the 2nd lien holder  We are working with Bayview (for M&T Bank) and BOA as 2nd lien holder. The first is saying they will only pay 10% of the principal balance which is $2,695.  BOA came back with a counter of $8,500.  All I read is that Freddie Mac will pay $6,000  HELP!


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Subordinate Lien Holders

  1. If the subordinate lien holder will not release its lien for $6,000 (or a lesser amount if there are other subordinate lien holders), can the borrower or another party contribute to the lien release payment?

    If the subordinate lien holder is accepting $6,000 (or a lesser amount if the $6,000 is being divided among more than one lien holder) in exchange for a release of its lien, it cannot require or accept additional funds from the borrower, real estate professional(s), buyer, or other party to the short sale transaction. When funds are offered from the short sale proceeds to satisfy a subordinate lien, the intent is to obtain a complete settlement of the lien and debt using those funds alone.

  2. How does the $6,000 maximum for subordinate lien payments affect IRS liens, tax liens, mechanics liens, HOA liens, etc.?

    The maximum amount of sale proceeds that is available for all types of subordinate liens is $6,000. Liens that have priority over the first mortgage lien, such as HOA super-priority liens in some states, should not be included in the $6,000 maximum. Those liens must be paid from other closing costs permitted by Freddie Mac to be paid from the sales proceeds (currently 3 percent) or by the borrower from his or her own funds.

Bayview/Freddie Mac should offer the entire $6,000. Escalate to Freddie.

Is this a hafa short sale?  The new rule when its a hafa file the 5 big servicers get 8500 for the 2nd.



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