Chase Freddie Mac 1st will only pay $6000 to Citi 2nd - Need advice

This the 2nd time in 45 days I am facing this dilemna.

The 1st will only pay $6000 on a Freddie Mac in the 1st deal. The owner had a deal lined up to bring $4000 to the 1st mortgage for an approval with a full release, and a deal with the second for $10,000 for a full release on the 2nd mortgage.

Unfortunately the 1st would not allow any money to be brought to the table for the 2nd, and since the 2nd would not give a full release without the extra money, the seller was advised by his attorney to close the deal and try to go back to the 2nd mortgage company after the closing.

I am now facing the same situation all over again. Chase has the 1st and Citi has the 2nd.

Has anyone been able to get the 1st to allow the seller to bring cash to the closing table to complete the payment to the 2nd?

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Permalink Reply by Katherine "Kat" Breig on November 6, 2011 at 6:04am

What State are you in? If CA read the Bill passed in July - SB 458 - Deficiency Judgments. Lenders can not ask funds to be brought in and NO Deficiency Judgement. If you are a member of CAR call the legal hot line. This is the verbiage guidleine they suggested I use. Seller will accpet the lenders approval letter as long as it is in compliance with state and federal law.

Permalink Reply by Ron Wysocarski on November 6, 2011 at 6:32am

I am in Florida.

Permalink Reply by Anna Chroscicki on June 13, 2012 at 7:10am

Were you able to work it out ?

I have similar situation with Chase as second.

Permalink Reply by Ron Wysocarski on June 13, 2012 at 7:18am

we were able to work it out with Citi by getting them to accept a lower amount. We closed this quite awhile ago, so things may have changed.(dont they always?) Persevere through the tough times, as the banks eventually will get tired of you, and push you further along the approval trail. Keep pushing.

Permalink Reply by Anna Chroscicki on June 14, 2012 at 4:05pm

I am happy for you. Thank you for response. Well, nothing else for me to do but "knock my head on the wall" :)

Permalink Reply by Justin Berry on November 7, 2011 at 6:46am

I've had similar situations.  Citi will probably allow your client to wire funds early - like 2 days before closing, Then will provide an updated approval letter granting a full release that you can close on.  Because a borrower can make a payment to a lender at any time, it likely wouldn't need to be disclosed on the HUD-1.  

Permalink Reply by Joseph Alfe on June 13, 2012 at 11:33am

all the time.  The issue is with Freddi owned deals only.

Permalink Reply by Kimberley Kelly on June 14, 2012 at 1:19am

I'm in California and Kat hit it on the head.  I've found that law to help me get the seconds to release.

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