Freddie Mac backed 1st only allowing $3K to 2nd, and "no other entity" can contribute! What to do?
I have a situation which has me a bit perplexed. IndyMac 1st serviced by Servicelink which is a Freddie Mac loan, 2nd is with SLS. The negotiator at Servicelink is telling me that Freddie will only allow $3,000 to the 2nd lien holder. Here is the exact verbage he gave me:
"Freddie Mac is the investor so unfortunately 3k is the best they will get out of them. No other entity is allowed to contribute to the 2nd as well.
With Freddie it is pretty much a take it or leave it proposition for the junior lien holders. I have submitted the offer to the investor. We should hear back the first part of the week."
The 2nd is requiring about $14,000 which gives us a big shortfall. I can probably still close the gap, but if they will not allow it to come from "any entity" what do I do??? Is this really Freddies policy?? I have always been able to find a solution around these things but this is one that is very concerning!!
Any advice here is appreciated!
Replies to This Discussion
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Permalink Reply by Jennie Blackburn on
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I feel your pain. I'm in the same situation.
Provident Funding (servicer of the 1st mortgage, which is owned by Freddie Mac) will not allow 3rd Federal (servicer of the 2nd mortgage) to get more than 3k, regardless of the source of additional funds. But 3rd Federal wants the seller to contribute $1,000.
So.....the whole short sale could fall apart over $1,000. Freddie Mac would rather lose $26,000 (REOs are fetching 20% less than Short Sales) than let the 2nd lender get another $1,000?
Preposterous.
If this were Fannie Mae, we could appeal and get this approved easily -- I've done it before. Fannie Mae knows this is a glitch in the system that creates a catch-22 for short sales.
I am appealing to Freddie Mac, but no answer yet.
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