I've got a short sale in progress with GMAC and Specialized Loan Servicing. Specialized is playing hardball and want $7k in cash at closing plus a $5k promissory note or they will not even submit it to the investor (Total owed is $53k). I told them no way for $7k in cash that GMAC is only giving $3k but maybe the seller will agree to a few $K in a promissory. My question to the group is...is this negotiating going nowhere because the seller is still making payments? Is this the time to start escalating to the VP level at Specialized?
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Personally I think the second is not a mortgage but a HELOC. They are always going to ask for $$$ at closing, anywhere from 5% to 70% of the outstanding balance. And it mostly depends on what they did with the $$ they took out. I have had several of these this year. The lender will always start high and you just have to prove the hardship and give them a lower counter and meet somewhere in the middle.
Keep in mind they can ask all they want about investment accounts (IRA & 401K) but they can not make the seller go into them. They can threaten all they want and hold their breath if they want. But the seller does not have to touch them.
They asked for his 401k acct which has less than $65k and he has less than $5k in the bank. He has a job but he has been supporting two properties. He was laid off and had to relocate for a new job so the short sale unit is vacant. What would you do in this case? Also the buyer has no money to pitch in either.