Comment

Comment by Jim Hale on February 21, 2011 at 12:13pm

Re the amount going to a second on a current transaction:  the amount they are counting as paying is 6% of the outstanding balance...but that amount is less than $3000.

Comment by Wendy Haisley on February 21, 2011 at 12:03pm

What Bank of America will allow 2nd is not their decision.  It is the investor's decision.  80% of mortgages are either FHA, FNMA, or Freddie Mac as investor.  Those mortgages are only serviced by BofA.  With FHA, max to junior lien is $1,500 plus FHA incentive to seller of $1,000 can be added to junior lien from proceeds making it a max of $2,500.  If mortgage is FNMA, then max is 6% of UPB or $6,000, whichever is lower.  If mortgage is Freddie Mac, then max to junior lien is $3,000 or 10% of UPB, whichever is lower.  If BofA owns the mortgage, (10% of those they service), then they are flexible with what they pay to junior lien depending on what it takes to put deal together.  That leaves 10% of mortgages with private investors and then it is a crap shoot as there are thousands of other investor possibilities and no way to know what they will allow to junior lien until negotiator informs you.

Comment by Ben Benita on February 21, 2011 at 12:02pm

ALL short sale approvals are based on 3 tiers:

 

Gross offer to value (BPO or appraised) - how close your offer is to BPO

Net offer to value - as noted below, what percentage NET you are offering compared to the BPO value

Overall total loss - some Investors will NOT permit certain dollar amount losses (some over $200k, some over $300k, etc., a VERY important number to know BEFORE agreeing to take a listing)

 

If all 3 of the above are within guidelines, you have a "Tier III" approval and the Servicing negotiator has "delegated authorty"  (he/she can go a few points either direction (for commissions, delinquent HOA/taxes, commissions, etc)

 

HUD - send me an e-mail, [email protected] and I can get you a copy of the one we use, takes 60 seconds to fill in depending on how fast you can type!!!

 

;-)

 

All my best to everyone dealing with short sales.

Sincerely,

Ben Benita

National Short Sale Negotiations Expert

Comment by Thom Colby CA Brkr 888-391-5245 on February 21, 2011 at 11:44am

@Jim Hale - think of it like the "Buy it Now" price on e-Bay.  Investors place a "net" number on every property that they will accept.  It sounds like the servicer is "delegated".  Ask the negotiator to make a formal request to the investor to consider your offer / net.  This of course assumes your offer is Fair Market Value and not a "Fire Sale" offer.

Comment by Thom Colby CA Brkr 888-391-5245 on February 21, 2011 at 11:40am

@Michael Schneider

I don't believe there is any "set formula"  I have seen approvals (on high-end properties) at 50% of UPB and some at 90% of UPB.  I think it all depends on the investor who owns the loan.

 

As for BPO values, most investors do not base their final approvals on BPOs.  BPOs are a simple and cheap way to get a thumbnail on the market.

Comment by Thom Colby CA Brkr 888-391-5245 on February 21, 2011 at 11:36am

BofA is typically paying 2nds $3,000. - I've not seen more than that in the past 3 - 4 months.

 

Thom Colby

Broker / Negotiator

Newport Beach CA

Comment by Thom Colby CA Brkr 888-391-5245 on February 21, 2011 at 11:34am

Better to have Title or Escrow complete the estimated HUD for sure.

Comment by SueEllen Morse on February 21, 2011 at 10:52am

Yes that's what I was going to do but I have done them myself.

Comment by Wendy Smith on February 21, 2011 at 10:47am

SueEllen, let your title company do the HUD.

Comment by Jim Hale on February 21, 2011 at 10:46am

Michael -

It sound like this number is supposed to be market driven.  The fly in the ointment is that the BPO is decidedly NOT the FMV....just the price an REO agent hopes to take the listing for ....before it's automatically lowered in pursuit of an offer.

That will come in right where our short sale buyer already is.

 

The banks are nuts. 

No news there.

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