Newrez (PHH) & Real Time Resolutions - short payoff allowed even if 1st isn't short? Current allowed contributions to Jr liens

Hi All:

I have a listing where I thought I had crossed all the T's and dotted the I's. Long story short (pun), the payoff on the 1st is significantly higher due to arrears and other fees accumulated during 2 loan modifications. 

SUMMARY:

1st Newrez (PHH) - est $425k payoff

2nd RTR - est $240k payoff

3rd Private - est 25k (verbally agreed to 12k) 

IRS - $25,0000

FTB - $3,000

HOA - $3,000

Shortfall is likely around $50k

1. Will newrez entertain a short payoff since the principal is really around $380k? Back in the 2010 era the first would only allow to be made whole 

2. Would the 1st or 2nd allow any proceeds to go to the seller? 

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Permalink Reply by Brett Goldsmith on January 12, 2023 at 5:45pm

How much is the home worth? You likely won't be able to short the first if they have a full equity position. No, you won't be able to have the seller receive proceeds. You likely need to give the IRS 0 and short RTR and the 3rd mortgage. Could try to reduce the amounts to FTB and HOA too, but that's minor based on your numbers.

Call if you need support. 310-564-6389.

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Permalink Reply by Phoenix Nest Homes on January 13, 2023 at 5:00am

What's the value?  Is it less than what is owed?  

Permalink Reply by Edwin Baloloy on January 16, 2023 at 9:02am

The 1st isn't short. However, the initial figures penciled out some proceeds to the seller with the principal balance. 

After requesting a formal payoff, the amount shot up by almost $50k and washed out any equity. It turns out that the loan modification signed had a "shared equity" provision of 25% minus improvements made:

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Permalink Reply by Minna Reid on January 16, 2023 at 11:32am

Still don't know the most important piece of info here- what is the selling price?

If it is more than the payoff amount ( not the PB - PB is now irrelevant) + closing costs, you will not get them to short. 

There are other ways to work this, but no way to advise without a sale price. 

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