Replies to This Discussion

Permalink Reply by Steele V. Propp on March 19, 2010 at 12:49am

I am starting to see this on a more regular basis. Second mortgages are getting ripped off. Yes, ripped off. As a negotiator, look at it from their standpoint. $3,000 is nothing. And perhaps by letting this go to foreclosure. the next time this first lender takes such a hard line on a second, they will remember that it cost them many times that amount to foreclose and go REO.

The first needs to be reminded of this. They can let the second have $20,000 or surely it will cost them double or more to foreclosure and resell as an REO. I would be escalating this argument on the first mortgage side.

We have gotten lulled into thinking second liens should just shut and take whatever is offered. They are in a stronger position that many of us seem to realize.

Can you see a basic problem with HAFA and seconds...

Permalink Reply by Jeff Payne on March 19, 2010 at 2:34am

I closed one last month, Chase recovery took $3000 but the mortgage amount on their second was only $29000. I do agree with Steele, the seconds do get ripped off but I also believe that is the risk they take for being in the second position.

Permalink Reply by Greg Zajdel on March 19, 2010 at 3:41am

I agree it is very hard to get a deal done. I had a 2nd lien in Bankruptcy dept. Clients had 86K loan balance. They were asking for 23000 to release the lien. I went back to Wells Fargo and consent their approval. Lady from Fannie Mae contacted Chase and she negotiated that for 8K (which will come from Wells) , they will fully release the lien. I got lucky.

Permalink Reply by Katerina Gasset on March 19, 2010 at 5:20am

Ask the recovery department if they will take a promissory note for the difference with zero interest and very low payments.

Permalink Reply by Katerina Gasset on March 19, 2010 at 5:26am

Steele- With Chase, I have to disagree with the idea that it costs them more to do foreclosure and REO. It doesn't.
Chase for Florida Foreclosures gets a discounted rate from a creepy law firm here that does the entire foreclosure for $3200. When they foreclose, they don't take care of anything. The agents bend over for listings- covering all the fees, taking care of the property, etc in hopes of getting reimbursed if and when they close on the REO.

Of course the seconds get ripped off. But at the end of the day, they still recoup some of their loss. Seconds just forget about the mortgage instrument and sue as a credit and collect as a creditor on the note. Since the note is a promissory obligation- they can sell those for 20 cents on the dollar to the fastest growing industry right now, debt collection services. The debt collectors make your life miserable and have remedies that are not too comfortable so at some point in time they are hedging on a payment of 50 cents to the dollar thereby making a small profit. There is obviously money in that profession or else the attorneys would not be opening up debt collection departments and would not be buying up these notes.

Permalink Reply by Elaine Kan on March 19, 2010 at 7:08am

Thanks everyone
Katerina, this is CA, purchase money 2nd and if home is sold in Trustee Sale, the 2nd is wiped out. Or from what you know there would be other ways for Chase to go after my sellers? For this reason, sellers will not and is not able to take prom note anyways husband has no job
Steele, I get that they are trying to recoup as much $ as possible but what I don't get is if this loan was not transferred to recovery dept and is still in the short sale/loss mitigation dept, they would be happy to entertain the 3k or a bit more to settle the debt; but now they are asking 20k to ONLY release the lien, not forgive the debt and they are still going to ask the homeowner for money afterwards
Jeff, just wondering if the 3k was for release of lien only or debt settled in full
Thanks again!

Permalink Reply by Steele V. Propp on March 19, 2010 at 7:16am

I have worked as an REO listing agent for many years. No one including Chase has ripped off agents for reimbursments. They hire asset management companies who while, strict on timelines for submitting invoices, pay out in an average of 30-60 days. With the listing commissions these guys pay (low) an REO agent wouldn't be in business long if they were constantly stiffed. Yes, it can happen on occasion but not with any reputable asset management company. Frankly, it's too easy to start placing liens on their other properties. But that;s another REO subject...

Of course it costs money to continue to hold a property. The $3,200 they pay a law firm is nothing compared to lost revenue costs, selling costs and all the other items that come into play.

It is estimated that it costs 1.5-2% of the value of the property each and every month to hold it. That is a distressed property industry figure taking all the above into account. And that was formulated before properties were worth less than the mortgages so probably closer to the 2%. So a $200,000 is costing $4,000 a month. And even if you sell immediately you are going to hold that property 2-3 months at a minimum. Then there is commission, upkeep and maintenance. It quickly adds up. Now compare that to letting the second have a bit more money.

It will cost more.

Besides, wasn't Chase the second lien in this case?

Permalink Reply by Van Bui on March 21, 2010 at 7:31pm

Elaine, if you have 2nd purchase loan in CA and it is a primary residence, you have a case. Escalate to high management of Recovery Dept. I closed one 2 weeks ago. I also got deficiency judgment clause removed successfully. Chase upper management DOES care. Don't give up. The sellers need you. Good luck.

Permalink Reply by Elaine Kan on March 22, 2010 at 9:50am

Thanks Van,

I have an analyst assigned in resolution office and no luck, the recovery dept still want close to $32,000 for release of lien on a purchase money 2nd in CA, loan amount is 138k.

Permalink Reply by Zulma Canchola on March 25, 2010 at 8:12am

Hello I have the same issue! who did you talk to in Recovery we are offering them 10% of a 76k loan. Please give me pointer who to talk to.

Van Bui said:

Elaine, if you have 2nd purchase loan in CA and it is a primary residence, you have a case. Escalate to high management of Recovery Dept. I closed one 2 weeks ago. I also got deficiency judgment clause removed successfully. Chase upper management DOES care. Don't give up. The sellers need you. Good luck.

Permalink Reply by Zulma Canchola on March 25, 2010 at 8:14am

Hello Greg! im in the same situation who did you talk to at Fannie Mae since the 1st loan is Fannie Mae own loan.

Greg Zajdel said:

I agree it is very hard to get a deal done. I had a 2nd lien in Bankruptcy dept. Clients had 86K loan balance. They were asking for 23000 to release the lien. I went back to Wells Fargo and consent their approval. Lady from Fannie Mae contacted Chase and she negotiated that for 8K (which will come from Wells) , they will fully release the lien. I got lucky.

Permalink Reply by Roberta Brien on April 1, 2010 at 8:37am

What is the Chase resolution office?

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