Borrower Not On Title
Hi Everyone.
Just picked up a shortsale this week in which the only borrower on the loan quit claimed his interest 6 years ago. The loan was originated by Freemont Investments in 2006 and is now with Ocwen. The borrower has been helpful and has even provided all the requested income and asset docs. My issue is that I don't want to add the borrower to the title. I ordered a prelim title report adding his name with the other 2 sellers on title and 3 open judgments came up. The file is difficult enough as-is with 3 mortgages to negotiate so I'm not looking to deal with 6 creditors on one file. lol.
Has anyone else been able to get a SS approved without the borrower on title? He's willing to sign all SS related docs at and before the closing. Its a fairly large deal so I don't want to drop the ball. I already have an executed contract and the shortsale package is almost complete. But I don't want to submit it now and waste a month with Ocwen only to find out I have to re-do all my docs. These Ocwen shortsales are already a pain in the butt considering they have outsourced their offices and the new Hubzu/Altisource auction process that I can hopefully avoid. Thanks in advance for your help!
Replies to This Discussion
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Permalink Reply by Short Sale Superstars LLC on
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I'd be reaching out to an escalation contact at Ocwen to see if they will require the borrower to be added on title. If he is required then it sounds like you don't have a choice, but to reach a settlement agreement with the additional judgments that likely will pop up on title. How large are the judgments? Depending on the investor on the 1st note and the size of the judgments, negotiating 3 judgments shouldn't be too difficult.
310-564-6389
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Permalink Reply by William Rios on
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Brett, I appreciate your positive attitude but I'm already negotiating 3 mortgages on this file...adding 3 judgments to the mix doesn't sound like found. lol, If ultimately I go down this route and I actually get all 6 approved/settled, I wonder how I'm going to juggle those expiration dates. lol
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Ill be calling Ocwen escalation dept. tomorrow!
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You got this! If you need anything assistance do not hesitate to reach out to me.
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I want to thank everyone who has chimed in for their help/comments. Im almost ready to submit this crazy shortsale to Ocwen but im a little confused about the closing cost they will allow.
Their shortsale package states "Closing costs not to exceed 2% of the contract sales price". Can i assume this means all cost that are not lien payoffs and RE commission? What about prorated property taxes due to buyer on the HUD?
Chad stated in an earlier reply that Ocwen "closing costs can't exceed 10% of the purchase price". Can I assume this includes all cost on the seller side of the HUD. If this is so, it would mean Ocwen will never accept a net lower than 90% of the purchase price?
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Permalink Reply by Saurabh Singh on
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Speculating on what a lender will accept is a very common mistake realtors make. They assume based on their past experience or peer information that a lender will allow x% closing costs and y% to pay off liens, HOA dues, judgments etc. In reality, there are various factors that determine what can be approved. Some important factors are the state where the property is located, the offered price, the appraised value, the outstanding unpaid principal balance etc.
The best thing to do is always to put all the costs on the HUD. If the second lien holder wants $10000, then that is what you should put on the HUD (on the seller's side). If your HUD does not meet criteria, you will be advised what the maximum permissible limits are for items that are not within permissible limits. You can then go back to the other stakeholders like the second lien holder, borrower, buyer etc. and either get the payouts reduced or obtain the difference. You can also negotiate with the lender if you think they are being unrealistic.
The idea is to get the borrower a chance to live happily, debt-free. Short sale is an opportunity to make this happen. It is simpler to present a 90% net on the HUD and obtain approval, but that should not be the approach.
At first glance it may appear that I am not keeping the lender's interest in mind but that is not true. I know that when realtors look for buyers asking the buyer to share costs, buyers assume higher than actual cost and end up making lower offers. That does not benefit the lender.
If Ocwen are not being fair with you, we may be able to do something about it. At this moment, however, you should ask them if they are willing to consider offers or if they want to put the property on HUBZU. If they want it on HUBZU, please let Altisource do the work. If they want an offer from your buyer, please record the conversation or save the email. Negotiating liens, finding buyers etc. are difficult tasks and you don't want to do all that only to find that the property needs to be listed on HUBZU. I do not appreciate Ocwen exploiting realtors, borrowers and investors to increase Altisource's income.
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