We processed a short sale several months ago, both liens with Union Bank. Seller insisted that her primary property was free of liens, and we were short selling her income town home. The title profile listed a 2nd lien for the primary property (in other words, she had a note secured by her primary property to purchase the income property. Seller insisted that her primary was free and clear and both liens were with her income property. We submitted a short sale transaction, allowing 3K towards 2nd lien. Union Bank replied that we should eliminate the 3K since they bundle both liens into one for this transaction.

Never once throughout the whole process did Union Bank corrected us to indicate that the 2nd lien was attached to another property. Upon final approval only one loan number was posted on the approval letter, I had my associate call the negotiator to verify that both liens were included in this transaction (I had another bank only listed one loan number at final approval) . The negotiator was on speaker phone and confirmed that both loans were covered in the approval. I have been in real estate for 26 years and I truly follow the motto "get everything in writing". So I told the associate we need something in writing, a letter, an email, etc. etc.  She end an email to the negotiator to confirm that both liens were included in the short sale approval. The written reply came back "Yes". 

Two months later our seller was receiving late notices for the 2nd lien, she called the bank, and to make a long story short, they told her that the 2nd lien was not part of the short sale approval.

Anyone having similar experiences, please write.  Thank you.

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