Sorry if this is a stupid question but how does it work if the seller has two loans (first and and equity line) but only upside down on the second? Where does all the seller fees get paid from? Does the first loan have to be above water enough to cover those fees?
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The most Sr. Mortgage being shorted should be request to pay commissions.
Make sure the 1st is not short by requesting a Payoff Demand from the 1st with a realistic date for closing. Then have the HUD drawn up just like any other sale. Show the entire payoff from teh demand on the HUD for the 1st. Make sure all costs are included on the HUD; Escrow, Title, Commissions, Taxes, County Stamps, etc. Whatever amount is left over goes to the 2nd. Submit that and the payoff demand from the 1st to the 2nd for short sale approval. Depending on the lender, it should be relatively quick to get it done. Make sure all of your costs are appropriate and not outrageous - don't include any costs you know the lender will reject such as HOA, Home Warranty, etc.
BTW, you do not need approval from the 1st if they are not being shorted.
Good luck !
Thank you both..that was very helpful. Both loans are with Wells Fargo with the second being a HELOC. Have either one of you ever had Wells release the seller of any deficiency in relation to a HELOC? I'm guessing no but just curious. thanks again!!
What state are you in. In Claifornia if any lender agrees to a shortsale, they release the seller of any deficiency.
Read your approval letters carefully.
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