I have a short sale with 1st and 2nd with WF. The 1st is a Fannie and is asking for $5000 in cash or 17K promissory note to waive deficiency; my client cannot afford either. The 2nd is telling my negotiator and client that they will not negotiate the 2nd until the 1st has closed. They are saying they cannot waive deficiency on 2nd because the first is Fannie backed. This is completely foreign to me. Any advice would be greatly appreciated! Thank you!
You need to be a member of Short Sale Superstars to add comments!
**********************************
like buttons
Replies
If I'm reading between the lines correctly, WF is probably asking for the 1st to agree to the short sale before they will agree to the short sale, this happens quite a lot. Essentially, they want the 1st to make them an offer, ie we will give you $6000 to release your lien.
The second part of your statement, "they cannot waive deficiency on 2nd because the first is Fannie backed" sounds like a strange explanation. Sometimes 2nd mortgages will not waive their deficiencies, other times they will waive it for a seller contribution or a promisorry note.
I don't see that there is anything "fishy" here, based on this information. The 2nd's position seems reasonable, if I understand this, at least under CT/NY laws. The 2nd will release, presumably for the consideration offer by the 1st. Then, the obligation remains. And, they are open to discussion.
Basically, the 2nd is treating their debt as an unsecured loan. And, not using their leverage in their lien to block the sale, thereby allowing your client to sell the property.
I have something kinda similar, WF will allow the short sale, but the Seller has to agree to keep paying the loan...they will not negotiate at all. Said that once the SS closes the Borrower can then call the Recovery Department to discuss it further????