We have several transactions recently where the 1st mortgage says, "we will only give $3,000 to the 2nd." The 2nd turns around and says, if we don't get $10,000, we will close the file and get foreclosed off and seek a deficiency. We closed one a couple of weeks ago where the 1st gave us advice on how to get around that, "Buyer agrees to deposit $7,000 with escrow to be used directly to 2nd mortgage upon close of escrow, in addition to the $3,000 that 1st mortgage agrees to pay for a total of $10,000 to be paid at close of escrow towards 2nd mtg." Any one else had this? How did you handle it?

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I'm caught in one of these right now too. Second is M&I. The negotiator at M&I refuses to give us anything in writing and has changed his number four times. It has gone from 3k to 6k to 7500k (with no note) to 8k with a note for the full remainder of the balance...yet he still won't even put THAT in writing. Not even in an e-mail. We just lost our first lienholder approval yesterday (ran out of time) because of his games. I'm open for ideas too.
I have seen this, coincidentally, with my Investor clients. We just had the Investor agree put the "difference" on the buyer side of the HUD and it was fine. Not sure how if someone is paying "market value". Usually, in an Investor purchase, there was big enough "discount" where the Investor could manage the "difference".
Jared, That's interesting that the 1st suggested handling it that way. Sounds like something they are trying to slip by the investor. Did they put this in writing? Was the money shown on the HUD? If not I'd be very concerned about fraud taking place.
Yes, it was an addendum that was submitted to the 1st and the 2nd and it was on the hud.

Bryant Tutas said:
Jared, That's interesting that the 1st suggested handling it that way. Sounds like something they are trying to slip by the investor. Did they put this in writing? Was the money shown on the HUD? If not I'd be very concerned about fraud taking place.
OK well that's a good thing.
Wilshire just suggested something like this to us on one where they are servicing the 1st. Unfortunately we are dealing with cash poor buyers who are using the Florida bond for downpayment funds.
Best is to start out with two different HUDs to avoid the scenario you mentioned and converge to a point in the middle of the gap between the two.
Hi Terri,

Basically:
- on the HUD of the 1st you're giving to the 2nd let's just say an amount of 10k.
- on the HUD of the 2nd you only give the 2nd $1000.
- the gap is $9000 and this is your "play money". Because both 1st and 2nd will want more you will have a small pot of money to "negotiate" with. You put up a fight, you give in some and everybody goes home happy or that is the idea.
Both 1st and 2nd will get more than what they initially thought they were going to get.

Makes sense?
Bryant Tutas said:
Jared, That's interesting that the 1st suggested handling it that way. Sounds like something they are trying to slip by the investor. Did they put this in writing? Was the money shown on the HUD? If not I'd be very concerned about fraud taking place.
.Just spoke to a 1st lein holder they don't care how the 2nd gets their extra monies as long as it does not come out of the accepted proceeds to the first, my 2nd wants an additional 2,000 so I just add it to the HUD1 as a third party payoff to the 2nd and everyone is satisified!! Love this website and all its comments!!!

Terri's idea is great during the negogitating process!!!!
Bryant Tutas said:
OK well that's a good thing.
Gosh. Going back to this, I WISH the 1st says that. I have had 1st's say, "if the buyer is willing to pay cash to the 2nd, WE WANT THAT MONEY!" And I was stuck.

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