Short Sale Agreement
We are in the process of short selling our home, our first mortgage company agreed to the selling price, Ocwen is second mortgage, our agent has tried to contact Ocwen only to be routed to India, where they know nothing. Ocwen has turned our second mortgage over to Nationwide Collection.
My question is this does Nationwide have the legal authority to negotiate an agreement to short sale? The first Mortgage has agreed to make a payment to Ocwen. Ocwen has Nationwide negotiating the short sale, nationwide wants us to make an additional payment to them in exchange for a release of lien letter. My concern is would this be mortgage fraud, since it would essentially be a side deal? We were told at closing part of the HUD statement asks if there were any deals made prior to..
Has anyone gone through a similiar situation? Would love to hear from you.
Replies to This Discussion
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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This is not unusual. When a 2nd lien has been sent to a Collection Company, that typically means the note was sold to that collection company at "pennies on the dollar". Just like your first mortgage, the collector is a Debt Settlement Company and they want to settle the debt. If you can come to an agreement with the collection company, MAKE SURE it is accounted for on the HUD and the First lienholder has approved it in writing (signed HUD).
I've been through this a couple of times.... you MUST have the approval of the 1st. If they don't approve it IN ADVANCE, they have every right to refuse the wire / check for the payoff.
Be Safe - get it approved.
Best of luck,
Thom Colby
Broker
Newport Beach CA
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Permalink Reply by Steve Early on
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Khill - Thom is absolutely spot on. You have to get the first lien to give you permission to make a payment to the second. They can say no. Their rationale is; if you have money to pay them, then we want it. They may allow others to contribute to the second, but not you. We have had other situations where the first lien didn't care, but you MUST get them to agree to this, and it needs to be on the HUD. In general, we find these debt collectors less reasonable to deal with than the original servicing company (i.e., Ocwen).
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Permalink Reply by Wendy Smith on
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as to the payment to release the Ocwen lien - Ocwen and Nationwide are NOT both paid - it's either one or the other - stick with dealing with Natiowide.
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BUT, it MUST be approved ON THE HUD, by the First Lien Holder. If not, and they discover it, they will reject the payoff and not release their lien. I have seen this happen and it's not great for the new "non-owner". They move in only to find out the prior mortgage was not released because they prior lender wasn't told about the payoff to the collector. Be careful, and make sure EVERYTHING is on the HUD. It works and your deal will get done.
Best,
Thom Colby
Broker
Newport Beach CA
Wendy Smith said:as to the payment to release the Ocwen lien - Ocwen and Nationwide are NOT both paid - it's either one or the other - stick with dealing with Natiowide.
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Absolutely! Everything on the HUD no matter what a collection company or any lien holder says/threatens/encourages/etc
For Realtors - participating in any part of a transaction that is outside the HUD may likely result in license revocation. I've never seen a transaction worth risking my license.
Khill, you do have an experienced (short sale) Realtor, don't you?
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Oh, and by the way --- on the subject of being connected to India where they "know nothing" ... our experience has been quite similar and now all the people we have working short sales demand to be transferred to the United States. Just be polite but firm.
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