I have a situation where the seller wants to scrape together about 25K so that he's not short on the first in order to avoid having that on his credit. (It would affect his employment) The 2nd does not show on his credit report so he'd get away with having delinquencies and an NOD but credit would not show the short payoff at all.
1st will only allow this payoff at closing (NOD filed, he cannot make payment now). The 2nd has been wonderful and says they're asking for 10%, quick approval etc.
This payoff will show on the closing document the 2nd needs to approve, so they will be well aware of it.
Has anyone ever done this? I'm thinking I need to convince 2nd this won't affect their payoff at all since if they won't approve it seller will just be short on both. Process will take longer, etc.
Thoughts on this? Strategy?
FYI 1st is Union Bank, 2nd is First Tennessee.
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Well I called the 2nd lender and asked if it was ok for seller to contribute 30K at closing in order to not be short on the 1st loan and they said yes! She was able to understand that it would not affect the amount of money the 2nd would get in the end. Let's see how this goes....
Strange strategy in my opinion, I'd be concerned of potential backfire and if the benefits outweigh the cons. If/when the 2nd see that's it's a full payoff they may want more funds as their position may of shifted in the more favorable direction to recoup more.
Brett@ishortsalenow.com
310-564-6389
www.ishortsalenow.com