Replies to This Discussion

Permalink Reply by Jeff Payne on March 9, 2011 at 10:51am

Your seller needs to write a QWR, Qualified Written Request, to ask for the MI company if the negotiator wont give it to you.  Do a search of one of our members posts, Ben Benita.

• ▶ Reply

Permalink Reply by Julie Cendejas on March 9, 2011 at 11:50am

I had tried that too and he still stonewalled me. HOWEVER - the seller called today and after 3 attempts someone gave it to him - so I have it now. So hopefully I can negotiate a bit better with them directly! (once I get the new offer)

I've searched for Ben's posts but I haven't had much luck - but I will try again - maybe I am doing it wrong.

Thanks for the reply Jeff - your responses are so helpful!

Julie

• ▶ Reply

Permalink Reply by Bob Bridge on March 9, 2011 at 4:16pm

You should have used the 5K cash as a contribution from buyer if the seller will sign note. In my experience so far the MI company will always go half of their initial blown out request. After you get there you need to show documentation why they can not afford a prom note and / or cash. You don't need to know who the MI company is. BOA negotiators will pass everything along. Bottom line they want something, if seller signs prom note then go higher on that and less on cash. If seller has no cash, ask if a contribution from buyer or realtor will work. I've gotten a 186K prom note and 50K cash reduced to 25K note and 2K cash but it was over 5 counters with MI. Good luck

• ▶ Reply

Permalink Reply by Julie Cendejas on March 9, 2011 at 4:51pm

Thanks Bob. Unfortunately the buyers could not come up with anything else - they had already come up on price - so that was out. 

I think if I could get them to come in with half their initial request (16.5K) then my sellers would sign a promissory note for that - as long as it's not a crazy amount they can't afford. 

I've read on here on many posts it's best to negotiate directly with the MI company. Not sure how true that is, but I would like to ask them HOW they feel that the sellers can afford such a contribution! 

My negotiator on the file with BofA wasn't all that helpful really - he was like ' this is their best and final offer back' - and that was only the first counter really. 

That is a great reduction you got - I can only hope I can do as well!

Thanks for the feedback! 

• ▶ Reply

Permalink Reply by Bob Bridge on March 9, 2011 at 8:28pm

The five major PMI companies are as follows:

1. MGIC aka Mortgage Guaranty Insurance Corporation

2. Radian

3. Genworth Financial

4. AIG’s United Guaranty

5. PMI

The reason the MI company would rather see the property go into foreclosure (on most cases), if the bank takes a discount - for a short sale The bank will make an immediate claim - if the property goes to foreclosure, they will not make a claim for another year.  The insurance company minimize losses".

each financial institution usually maintains a pre approval letter or agreement with the PMI Company as to how much of a loss can be taken on any transaction. To the extent the short sale will result in a loss under the pre-approved ratios, the lender can negotiate and approve the sale on its own. If, however, the lender believes it needs input from the PMI company or the loss will exceed the authority given the lender, then the lender will send the PMI company the entire file to review for their participation. Most PMI companies do not maintain particular percentage losses they will accept. They generally handle this on a loan by loan basis taking into consideration the overall property value, loan amount and seller’s circumstances.

• ▶ Reply

Permalink Reply by Juan-Manuel Valera Jr on March 9, 2011 at 10:10pm

Very insightful and true to the bone, Bob!

Bob Bridge said:

The five major PMI companies are as follows:

1. MGIC aka Mortgage Guaranty Insurance Corporation

2. Radian

3. Genworth Financial

4. AIG’s United Guaranty

5. PMI

The reason the MI company would rather see the property go into foreclosure (on most cases), if the bank takes a discount - for a short sale The bank will make an immediate claim - if the property goes to foreclosure, they will not make a claim for another year.  The insurance company minimize losses".

each financial institution usually maintains a pre approval letter or agreement with the PMI Company as to how much of a loss can be taken on any transaction. To the extent the short sale will result in a loss under the pre-approved ratios, the lender can negotiate and approve the sale on its own. If, however, the lender believes it needs input from the PMI company or the loss will exceed the authority given the lender, then the lender will send the PMI company the entire file to review for their participation. Most PMI companies do not maintain particular percentage losses they will accept. They generally handle this on a loan by loan basis taking into consideration the overall property value, loan amount and seller’s circumstances.

• ▶ Reply

Permalink Reply by Julie Cendejas on March 10, 2011 at 2:37am

Thanks Bob - that is all so insightful! 

Now that I'm starting all over since the current buyers walked - so you think they will come back with the same demands if/when I get another offer? How do I get them to just allow them to do a promissory note? They have no cash - unless they take it out of their IRA- and I can't believe they want them to do that. (ok, I can believe it- but really?) 

 

Quite honestly I'm not even so sure I will get an offer for what the bank wanted again - so foreclosure may be very much a reality for this property. Makes sense that the MI company would probably rather see it go that way - which is just super sad! 

 

Thanks - you have been so helpful

• ▶ Reply

Permalink Reply by Bob Bridge on March 10, 2011 at 4:45am

Yes,I know it's unfortunate. The higher the prom note the less cash. Keep in mind the prom note is unsecured so if the seller's are thinking BK down the road it can be taken care of then. You can probably get them down to 1K cash which can be taken care of by buyers or your commission, (i.e. contribution). Call the MI company and get there bottom position. Tell them you can show no cash and a hardship from the seller. Also show them the REO value of the property. Even have the seller's call and explain there hardship. Good luck! Always have your seller's best interest, if you can't get no where a Deed in Lieu might be there only option. Yeah you loss the listing but gain valuable trust and possible referrals down the road. Plus that good ole feeling of helping someone. Best Wishes!

• ▶ Reply

Permalink Reply by Julie Cendejas on March 10, 2011 at 6:54am

Thanks again Bob - 

I actually got the contact information of the person handling this file and the seller is going to call also. I pray we get some sort of mercy as far as the amount they want. My sellers just do not have it - period. 

I agree completely about doing all I can in my sellers best interest. I hope and pray they don't have to go thru a foreclosure but if that is the best option - then I will welcome it - I just want to see what is best for them - they are a dear couple and have been trying to sell this house for over 2 years and just beside themselves it's come to this even. 

 

 

• ▶ Reply

Permalink Reply by Julie Cendejas on May 5, 2011 at 5:39am

Round 2 - new offer - and MI company is now asking for 5K at closing and 12K promissory note. It's crazy. I FINALLY was able to talk to the MI companies negotiator and he flat out told me that the number is based on my sellers IRA. The same IRA my sellers live off of along with SS - can they do this? 

Apparently so - as they are. 

We countered at $1800 cash at closing - no promissory note. About 10% of their request. 

Any other thoughts out there? 

Thanks

• ▶ Reply

Permalink Reply by Julie Cendejas on May 6, 2011 at 2:45am

Thanks Brian - appreciate the feedback. 

IF I can get thru to the negotiator with the MI company again I will - I was amazed when I was able to reach him, the other 50x I tried he never answered. Then of course he chastised me and told me to give my counter to BofA and they will submit to him. He even 'Tsk, Tsk, Tsk'ed' me as I was trying to talk. I'm just trying to get this thing moving as my bank negotiator is SOOOO slow - they even confirmed they submitted the file to the MI company when they really didn't but didn't realize this till I called the MI company to find out what the hold up was - and they noted - it was never submitted correctly thru their 'm-link' website so they had nothing. There went 10 days lost there. 

 

Is there a 'typical' amount a deductible is on a loan - like 10%-20% (or more??) of the loan? If he is starting at 16K cash (first request was this) - then is 2K cash even plausible? 

• ▶ Reply