I have a short sale with Ocwen as the 1st. We have approval from the 1st with a maximum of $6000 to the 2nd (SLS). SLS negotiated down to $8400. Buyer agreed to contribute the additional $2400. Now SLS says that they cannot approve it because CA law (have a call into CAR legal hotline) does not allow seller OR buyer to contribute and that in can only come from the first. Ocwen states that under no circumstances will they pay more than $6000. Both are purchase money loans. Anybody ever deal with SLS on something like this?
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Amy -
The contribution CANNOT come from the Borrower / Seller - (search SB458) - It can only come from Buyer or the Agent as a contribution from commission. I have the same thing on a BofA Coop Short Sale (1st) paying $6,000 to SLS - and the $9,000 additional to make it $15,000 for SLS is not coming from the Seller. (Read between the blurry lines)
Thom Colby
Broker
Palm Desert & Newport Beach CA
Just went to seminar hosted by Kathy Merringer and the D.A. of Los Angeles, The seller can willingly contribute to junior lien holders, but lenders CAN NOT ask for Seller to contribute. A little unknown fact.
I should have said "most lenders will not allow the contribution to come from the Seller/borrower so it isn't perceived to be required".
I agree with Edward - except - lenders are being overly cautious and not allowing sellers to contribute - even willingly.
I have dealt with SLS and have never had them take that stance before. I would call the CAR hotline, but from what I know, a lender can not ask the seller to contribute, but the Seller may willingly contribute to close. As far as the Buyer, I have never heard that before, unless the 1st is owned by Fannie Mae. If it is, then the 2nd can not receive more than $6000, period. Are they asking the agents to contribute instead?
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