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Wells Fargo Approval-2nd Lien holder wants cash from borrower

Posted by Verenice White on June 16, 2011 at 4:53am in Short Sale Discussions

Hello All:

 

Got Wells Fargo to approve the 1st and has conttributed 10% to the second lien holder.

 

I have a 2nd with a Federal Credit Union (golden 1).  My sellers are willing to contribute cash to close the deal.  I am negotiating the 10,000.00 to a lesser amount for them.

 

Once I negotiate that amount, I need to revise the HUD-1. 

 

Do you know if Wells Fargo could pull my approvale since it wasn't on the original HUD-1?

So close!!!!

 

Thanks a million from Pismo Beach, CA.

 

Verenice White

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Replies

  • Scott Korbin June 19, 2011 at 8:05am
    Listen to this guy. That's very good advise.

    Bryant Tutas said:
    Please do not use 2 HUDs. Do as I suggested in my first comment and you should have no issue. Don't ask the lender if it's OK because must don't fully understand POC iems. Just do it and the HUD will be approved.
  • Scott Korbin June 19, 2011 at 8:04am

    Yes, I've done that before. In my case, the 2nd Lien Holder settled at the closing as stated on our preliminary HUD-1 and agreed to release the lien in return for the Seller agreeing to pay the balance of the judgment by a specific time after closing. However, the 2nd Lien Holder was a secured judgment from a previously unsecured creditor, not a 2nd Mortgage.

    Farooq Khan said:

    Any how you have to get a final approval for the HUD before settlement from Wells Fargo. You must show Cash contribution from sellers/browwers to the 2nd lender on the HUD and get approval of that HUD from Wells Fargo. The key is Seller/Browwer should not get a single penny but they can contribute cash to close the deal.

    If 2nd allows a note to be carried would be the best bet and the seller can pay that note later and settle with them right after the close

  • Scott Korbin June 19, 2011 at 7:59am
    Agreed.

    Bryant Tutas said:
    Yes they can. I would place the additional payment from the seller as a POC item on their side of the HUD instead of as cash to close. Doing it this way doesn't make any difference to the seller but it will still zero thes eller out at the bottom of the HUD. This will help avoid red flags with Wells Fargo
  • Scott Korbin June 19, 2011 at 7:58am
    Agreed.

    Tanya Seeger said:

    There should only be one HUD for the transaction - you can be creative, but being this creative could cost you.



    Tim W said:

    you can do a seperater hud to the first and and seperate hud to the second.
  • Bryant Tutas June 19, 2011 at 4:56am
    Please do not use 2 HUDs. Do as I suggested in my first comment and you should have no issue. Don't ask the lender if it's OK because most don't fully understand POC items. Just do it and the HUD will be approved.
  • Farooq Khan June 19, 2011 at 4:36am

    Any how you have to get a final approval for the HUD before settlement from Wells Fargo. You must show Cash contribution from sellers/browwers to the 2nd lender on the HUD and get approval of that HUD from Wells Fargo. The key is Seller/Browwer should not get a single penny but they can contribute cash to close the deal.

    If 2nd allows a note to be carried would be the best bet and the seller can pay that note later and settle with them right after the close

  • Tanya Seeger June 19, 2011 at 2:02am

    There should only be one HUD for the transaction - you can be creative, but being this creative could cost you.



    Tim W said:

    you can do a seperater hud to the first and and seperate hud to the second.
  • Tanya Seeger June 19, 2011 at 2:00am
    I the 1st is allowing 10% that is A LOT. Typically if the seller comes in with cash that amount would need to go to the 1st lien OR the 1st lien would want equal the 2nd lien. You may want to look at having the 2nd carry an unsecured note back for the difference, but make sure that you are getting full debt forgiveness.
  • Tim W June 19, 2011 at 1:33am
    you can do a seperater hud to the first and and seperate hud to the second.
  • Bryant Tutas June 19, 2011 at 1:00am
    Yes they can. I would place the additional payment from the seller as a POC item on their side of the HUD instead of as cash to close. Doing it this way doesn't make any difference to the seller but it will still zero thes eller out at the bottom of the HUD. This will help avoid red flags with Wells Fargo
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