Advice Needed - Has Anyone Dealt with 21st Mortgage?

Okay, my client and I are at our wit's ends...

She purchased a modular home in the boom (worth 1/2 as much as her loan is on it). Tax records show it's Real Property, not a mobile home, not a manufactured home - so it qualifies as being able to be shorted.

The Monkey Wrench: her loan is with 21st Mortgage, with whom we have been told repeatedly after speaking with them that they DO NOT do short sales!!! I believe 21st is a hard money lender, but she has an FHA loan!!!

How is this possible and is there anyway around this? We are in a non-recourse state (California), but 21st has told both my client and myself that she will still be held responsible for the deficiency - yet why are they telling us this if they won't approve a short sale???

So what do we do? How can we sell her home if her mortgage company doesn't allow short sales? Is she stuck? This makes no sense to me, especially since it will cost 21st more to foreclose that to short it.

Thanks in advance for any help and/or advice! This one has us scratching our heads...

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Permalink Reply by Randy Fox on December 8, 2011 at 2:39pm

Brian, thanks so much for the info, I appreciate it. The home is on a permanent foundation; it was purchased in August of 2008 and is on the tax roll - we'll check to see if it has HUD tags. We'll also look into seeing who the actual investor is - if it's GSA-backed I'm guessing the next step would be to contact the investor directly and bypass 21st altogether?

Permalink Reply by Raymond Henson on January 26, 2012 at 4:44am

I am in the same situation, Randy.  21st Mortgage told us they would accept a lower offer price on a sale (70% of loan value), but that my client would have to pay back the difference.  While they made us market the property at too high of a price, California passed a law that says lenders can't make you pay back the difference.  Now, 21st Mortgage says they will not do a short sale in California, period.  We had an attorney come to our office that said, while companies can't require you to pay the difference, you can volunteer.  21st Mortgage said no way.  I agree, it makes no sense.  These clients need help and they can't get it.  Did you ever find any options?

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