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Permalink Reply by Richard Baxter on July 17, 2012 at 7:24am

Usually no, in the case of it being put on the HUD, although I would try that route first, just to see if they will approve it. If they say no, then usually the homeowner will have to make a contribution to the 2nd before closing

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Permalink Reply by Rick Trono on July 18, 2012 at 5:59am

Richard,

Won't the 1st have to approve the contribution to the 2nd even... if it is prior to the close?

Rick

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Permalink Reply by Jeremy F Garcia on July 18, 2012 at 4:45am

Rick, this one is easy.  If the 2nd is requiring more money than the first is willing to give and either the seller or the buyer is willing to make up the difference to the 2nd this can be done by what escrow calls "POC" paid out side of close this is a line item in the HUD that would show either the buyer or the seller contributing to the 2nd.  By placing it in the HUD and labeling it POC you have given written notice to the first along with full disclosure that the 2nd will be receiving additional monies over what the first was willing to give and because it was paid outside of the transaction and you have disclosed it, it is 100% legal.  We completed 18 short sale last year where either the buyer or the seller contributed to the 2nd.  Logistically, lets say the buyer is going to pay the difference, that money will have to be in the form of a cashiers check brought to escrow when they bring their down payment money in.  So they will have two checks, one will be for their down payment made out to the escrow company the 2nd will be for the 2nd lien holder in this case made payable to the 2nd Citi.

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Permalink Reply by William F Griffin Jr on July 18, 2012 at 5:40am

It doesnt not work if it is a HAFA short sale.  Buts thats how we do it with a traditional ss. The last one we did the 1st allowed the 2nd 6K but the 2nd wanted 10K. I had 6K on line 504 of the HUD and on line 509 the 4K to be paid to 2nd within 24 hrs of closing escrow. The 1st approved the HUD and the buyer was willing to purchase personal property worth $4K from the seller.

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Permalink Reply by Rick Trono on July 18, 2012 at 5:59am

Bullfrog,

Thank you...great reply!

 

Best,

Rick

 

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Permalink Reply by Jeremy F Garcia on July 18, 2012 at 7:31am

Rick the way I explained in my previous post has worked with both HAFA and HAFA short sales.  You will send a final closing HUD to the 1st about 72-48 hours before the close of escrow in that HUD you will have the POC amount in the HUD going to the 2nd the first by approving that HUD will have approved the additional monies going to the 2nd.  Let me know I can send you one of our closing HUD's as an example.

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Permalink Reply by William F Griffin Jr on July 18, 2012 at 8:53am

We just closed a BofA short sale and BofA refused to allow the seller or buyer to contribute to the second, they said it violated their HAFA guidlines. 2nd wanted $6,000 to release lien and BOA approved $3,000 on the HUD. Per the negotiator at BOA I had to have the buyers increase the purchase price $3,000 and BOA added that to the net to the 2nd. So basically the buyer gave the 3K to BOA and BOA gave it to mercantile.

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Permalink Reply by Rick Trono on July 23, 2012 at 2:07pm

Bullfrog,

Please send Hud

Thanks in advance

Rick

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