VA Compromise Sale with Junior Lien Converted to Personal Loan, but...

Hello all,

I have a VA short sale, Wells Fargo first lien holder and CitiFinancial holding second.  Wells Fargo already appraised the property, so I know the minimum net amount Wells wants to receive at closing.

In order for Citi to release the second, Citi wants the seller to pay $1,000 "good faith deposit" at closing, and the Citi investor wants to see this $1,000 on line 505 of the HUD.

That sounds fine however, has anyone closed a similar short sale where the junior lien holder demands the seller was to "bring cash to closing" -- in a VA short sale?

I've closed a lot of VA short sales over the years, especially with Wells Fargo, but this is the first time a junior lien holder has asked for cash at closing when it was a VA Compromise Sale.

Would perhaps the sellers pay this $1,000 outside closing (POC), but still show the $1,000 on the HUD?

As always, your input and thoughts will be greatly appreciated!


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Comment by Marie Stein-Mosset on August 27, 2015 at 7:45pm

Frank, did you get this resolved?  I'm new to Superstars and I would interpret "seller" to be Wells Fargo as no borrower should have to pay out any money, however having said that maybe its allowed in your State?

Comment by Frank Biganski on June 25, 2015 at 2:28am

Thanks Brett but that's what I'm afraid of, as I've never seen VA agree to any payout to a junior lien holder (not the loan servicer but VA).

Just trying to get a general feel for other agent's experiences as to whether VA will agree to it, so I appreciate your reply!

Comment by Brett Goldsmith on June 23, 2015 at 2:48pm

I'd just confirm the 1st doesn't have an issue with this reflecting on the Est. HUD. The 2nd wanting a contribution does not seem too far out of the norm. Maybe you can push back and get that waived.

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