Negotiating Junior Liens

• Types of Junior Liens.
•  
  • Mortgage-HELOC

  • IRS Liens- IRS Publication 783

  • Code Enforcement Liens

  • Property Tax Liens

  • Mechanic Liens

  • Judgments

  • HOA Liens

  • Collections

   

• When to start working with the junior lien?
  

• • At time of listing.

  • Open dialogue.

  • Order a payoff

  • Is it a HELOC?

  • Cash out or purchase money?

  • Is it the same lender?

  • Order title search

• Know the maximum the first will pay.

• • HAFA  $6,000

  • Freddie HAFA  $6,000

  • Fannie HAFA  $6,000

  • FHA PFS  $1,500 plus you can use the seller incentive of $1,000

  • VA Compromise. Net 88.13% of appraised value.  

  • If none of the above start with 10% of the balance owed or $1,500 whichever is less.

• When and how to submit the Short sale to the junior lien(s).

• • Submit at same time as 1st mtg

  • Dual HUDs

    • One to the 2nd offering less

    • One to the 1st paying more

  • If they ask for approval from the 1st try submitting a payoff letter.

• Negotiating

• • Lien Removal

  • Amount Paid

  • Cash Contribution

  • Promissory Note

  • Deficiency Waiver

  • Credit Reporting

• Misc

• • Who can pay?

  • Paying prior to closing

  • Placing payment on the HUD

  • 1st won’t allow additional payment

  • Junior wants it “off the HUD”.  RESPA

  • Move Lien to different collateral

  • Just can’t come to an agreement at all? Seek legal advice

    • BK

    • Lien Stripping

    • Sate specific.

      • Notice of Homestead FL Sta. 222.01 (example)

  • Start over. The answers may be different the next time.

• If all else fails have the borrower contact the lien holder and/or an attorney to discuss remedies to have the lien or judgment removed from the property.

Negotiating Junior Liens Outline.pdf

Wendy Rulnick

Wendy Rulnick is a licensed Real Estate Broker for over twenty years, and has sold hundreds of short sale and pre-foreclosure properties. She has been featured in Kiplinger Personal Finance Magazine and Florida Realtor Magazine as a short sale specialist. Wendy also teaches Short Sale seminars and has developed a special agent training and resource site with her business partner, Bryant Tutas - www.shortsalesuperstars.com.

Bryant Tutas

Bryant has been in Real Estate for 18 years and is the Broker/Owner of Tutas Towne Realty, Inc located in Kissimmee FL. He is also the co-founder of Short Sale Superstars and co-broker of REGrow, LLC. Negotiating Short Sales is the cornerstone of his business. He does it often and he does it well.