Hello all! Long story short....Fannie Mae 1st with OCWEN (approved subject to 2nd release), SLS 2nd and Morgan Stanley as the investor. SLS acknowledged Fannies $6,000 max to investor but investor INSISTS on $15k! Walked them thru the scenario of write off / collection and then deal with collection attorney as well as eventual conclusion that homeowner will (if foreclosed by 1st) file BK to protect themselves from deficiencies and they will get nothing......hasn't gotten me anywhere. I have a regular phone number for Morgan Stanley but not sure if that is even something they deal with in their regular banking divisions. ANY suggestions? I could really use some contacts if anyone has them.

Thanks in advance....you guys ROCK!

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Thanks for the input and advice Ron. Idaho is a non-judicial state. In my discussions with Fannie Mae they will not allow anyone to contribute additional funds to the junior liens. I must be talking to the wrong people at Fannie Mae. Do you have a contact for the exception?

No account with Morgan Stanley. No investment accounts at all. Good thought though.

It's correct that if Fannie contributes $6k to junior liens that "the junior lien may Not collect any additional monies....as part of the Closing".  A "payment on account" can be made at any time prior, in order to get the junior's "acceptable pay off" down to $6,000 (ie. junior will accept $11K....a $5k payment is made now, and junior generates Approval Letter for $6k balance, to be collected at closing).  There can be some risk of the advance payments, if the short sale doesn't close.  Payments on an account now, would not be part of the closing, and would not be required to be shown on the HUD.  SLS has agreed to this in the past, even with an agreement to return the advance payment if the sale didn't close, but that never had to be tested, as the files closed with the Fannie $6k contribution.

Thanks for all the suggestions and clarifications. I will consider the prepayment idea, especially IF I can get a letter from SLS stating that they will accept difference at closing from Fannie as payment in full with no deficiency and IF they will agree to return the payment if the short sales falls. This is a cash transaction so no other contingencies and the buyer is ready to close.Highly unlikely it will fall, but you never know. Thanks again....



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