I asked the question earlier and got some great answers but, unfortunately, still haven't been able to resolve the situation.

 

My clients have a first with CCO Mortgage and the second with Chase.  The loan originated with WAMU but is now owned by Chase.  We had a buyer - got approval from the first who only allocated $3000 to the second.  Chase said that they wanted a $45,000 cash contribution to even give an approval (with no waiving their right to collect the deficiency).  The sellers were able to come up with an additional $1500 by borrowing from friends & family.  Chase said they wanted $45,000 and nothing less!  My sellers do not have the money to come up with that cash contribution.  In the meantime, the buyers have now walked from the contract.  We escalated and got the same answer.  The sellers offered to sign a promissory note with Chase for the full $45,000 and Chase said no - they don't do promissory notes because it is not tied to any collateral and they would end up losing the money if the sellers declared bankruptcy.

 

I talked to someone at Chase this morning and he told me that they will not settle a debt for less than the $45,000 (or $50,000 if a new offer does not get more money allocated to them by the first lienholder), it does not matter what the value of the property (it will not sell for enough to make the first lienholder let alone have any money allocated to the Chase loan). 

 

So my question is:  is there any way to get Chase to approve the short sale, short of having the sellers come to the table with a $45,000 cash contribution?  I would hate to see these people go to foreclosure, but based on my conversations with Chase so far, this may be what happens.

 

Thanks.

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Is there any way you can sell the home for more money now that the buyers have walked?  In some markets conditions have improved a lot. 

Thanks Pat.  We have put it back on the market at a price that would make the first lienholder whole and would allow a little bit for the Chase second.  However, this is a new home neighborhood where the builders are still building and this house has at least 15 builder lots within 2 blocks of the house!  We have had it back on the market for over a week now and have had no showings and no calls! 

I had the same situation with USAA as a 2nd.  Seller wrote another and more detailed hardship letter stating he didn't have a job and wasn't working.  He offered $1,000.  This went back and forth a couple times.  USAA wanted $35,000.  We switched from a HAFA to a traditional sale where the 1st lender gave $3,000 more to the 2nd.  My last email to them was they either had to accept the $1,000 offer from the seller and the amount from the 1st or the seller would contact the 1st and let them foreclose.  We said there were no other alternatives.  USAA came back and approved it after a week. Have the seller write another letter specifically to Chase detailing their situation and offer them the $1,500 or you have to let it go to foreclosure.  If it goes to foreclosure Chase won't get anything.   

Thanks Celeste.  Unfortunately, when I talked to the Chase person this morning and the Chase supervisor, I emailed to them comps to show that the house would not be able to be sold at a price that would get them any money from the sale.  I was told that they are not basing their decision on what they will get from the sale, but on the large dollar amount of the loan.  I was point blank told by this person today that if the sellers cannot come up with the $45,000 they want, then the sellers really don't have any other option but to allow it to go to foreclosure.

 

What really made me mad at Chase this morning is that they sent my sellers a letter that said they had a new team assigned to the account and and if they were unable to pay the full balance, they may be able to pay less than they owe or set up a repayment plan to pay off the amount over time.  When I asked the person about the letter this morning, he said that this only applied if the sellers were willing to stay in the house.  But these options do not apply to a sale or a closing.  They will only approve the short sale with a $45,000 cash contribution!!!

 

This is tough, because there are some sellers that have done everything to save their home, and, unfortunately, are not able to.  I am perplexed on this one!

Wonder if they would remove the lien from the property and make it a personal debt to the sellers?  That way you could sell it, but the sellers would still owe the $45,000.  I'd stay on their back with the foreclosure issue. I can't believe they would want the property to go to foreclosure, but you never know with these banks.

Barbara, my first question is "how much is owed on the 2nd lien".

Next call Chase and ask them if they will speak to the media -as they are on the phone with you - they will tell you  "No" they can't speak to the media since there is no borrowers authorization on file. Let Chase know that you did not contact the media, but they got wind of it and phoned you, and you want to keep your good relationship with Chase.

1)  ALWAYS ALWAYS ALWAYS remember the lower level "people" you deal with on short sales are called:

"Negotiators"

for a reason......remember ALWAYS why they carry that job title.

I would say with 99% certainty you just need to get to the decision maker and they could clear the $45k requirement.

We will have a new book out on short sale negotiating in the weeks ahead.......

If you want to get my team directly involved (at NO CHARGE, we do all the processing and negotiation work for you), email me directly:

[email protected],

or, do EVERYTHING you can to escalate your file, and/or then find out who the Investor is and contact THEM directly!!!!

Again 99% certain you will get the $45k requirement waved when you get to the decision maker.

Best of luck if you

Hi Barbara,

Read about your dilemma earlier and just now getting to you.  How much is the debt on the 2nd??? I'm going to assume that the 2nd with Chase is past due more than 5 months and a charge-off.  Tell me what the total debt is and I'll give you some options.  I will tell you that whenever I have Chase in 2nd position, I make my sellers sign a statement that they will keep the 2nd from going past due more than 5 months and I spell out very carefully what happens if they go to charge-off, which is pretty much where you are now.  Chase has the nastiest collection center of any lender out there for their charged off equity lines.  Interestingly enough, their credit card division is a piece of cake.  The equity line folks don't care if they tank your short sale.  Their position is that they require what they require to release the lien and you can take a hike because they have already charged off the loan.  I have seen 2nd's settle for 500.00 and I have seen them receive 200k.  Depends on the circumstance.  The amount of the total debt and the amount that they are requesting will tell me a lot. Thanks...email me at [email protected].  We'll talk!

Barbara

 

Sounds like the loan was bounced around a lot. I would ask them to produce the note for the loan.

You need to PROVE that $45,000 is IMPOSSIBLE.   Their best case scenario right now is $3,000 via Short Sale because Foreclosure is $0.

If the Short Sale ends up denied after all that .. then the seller might have to file bankruptcy.  Once that is done the Short Sale will probably be streamlined.

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