B of A
I have a short sale approval on the 1st lien with BofA. I'm currently working on the 2nd lien approval with SLS. SLS doesn't want to lower their payoff amount. However, the seller is willing to contribute the difference ($5K) at closing. Here's the kicker... BofA will not allow it! Can you imagine that... BofA is stating the amount of funds they're allocating (6% of outstanding balance) to SLS is the maximum they'll allow regardless who's paying it. Any suggestions?
Replies to This Discussion
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Permalink Reply by Kevin - Greenville, SC on
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Is it a Fannie Mae Loan?
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6% of the UPB is a Fannie Mae 'guideline' allowed to come out of the net proceeds to the 1st, HAFA or non-HAFA with no other parties being allowed to contribute to subordinate lien holders. Get all lien holders talking to each other.
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Permalink Reply by Joseph N. on
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1st lien holder can't contribute more because of the 6% UPB. The 2nd lien holder seems to be adamant that the investor won't settle less than the 10% of the balance. The 2nd was a purchase money loan. I believe in Ca. the 2nd lien holder can't pursue the the homeowner once the home is sold as a short sale or foreclosure. Are you familiar with this? If that's the case, wouldn't you think they would settle for whatever they can get for the 2nd lien?
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Permalink Reply by Bryant Tutas on
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I would just place the $5,000 on the seller side or buyer side of the HUD as a POC item. I have done this many times with FannieMae and it has never been questioned. Don't ask. Just do it and chances are it will slide right through.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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I have the same scenario. BofA 1st as servicer for BNY (UPB of $500K) and SLS 2nd for Deutsche (UPB of $150K). (Selling price is $400K)
BofA is approving $6K to 2nd. SLS will not present anything less than $20K to Deutsche for consideration. BofA says if an approval comes through from the 2nd showing a $20K approval, they will decline the short sale and send to T/S on February 3rd as planned (already postponed once). BTW, BofA has been awesome and the Twitter team has been extremely helpful.
SLS has been far less than cooperative. In fact, yesterday the negotiator for SLS stated the additional $14K could come from "anywhere" to make up the difference - which - in CA they cannot request for short sale approval. Now, with notice, I record all telephone calls with SLS.
I started this file 2 years ago! This is Buyer # 7. Every buyer has walked away because the process is taking too long or to get a response from the lenders. BTW, this transcation was HAFA a couple of times but is no longer HAFA.
Has anyone had any luck contacting Deutsche directly ?
Thanks Superstars -
Thom Colby
Broker
Newport Beach and Palm Desert CA
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Permalink Reply by Minna Reid on
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Ive had this issue a few times - mostly Freddie though. I could not get a higher payment to the second at all, but I was able to get a lien release for the smaller payoff. Not ideal, but it made the sale possible. Once the note is unsecured the owner can settle it.
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Will SLS accept after the close? Have you dealt with SLS before with the same situation? Thank you for the feedback.
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How can the settlement company record without paying the 2nd and the lien being released. I think "hiding" this action is questionable.
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Paola,
If there's additional money to pay into the transaction, it should go to the FIRST lien holder BEFORE it goes to the subordinate lien holder.
Statements like "You have to be creative and play the game..." would be an interesting discussion to have with your E&O carrier.
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