What are Firsts Taking & What Are Seconds Taking?

Example:

AHMSI on the First loan and the loan is 355k.
Chase on Second and loan is 165k.
Both Purchase Money in CA sales price 350k

On the Preliminary HUD I was thinking:

250k to AHMSI (70% of the Frist loan)
72k to Chase (42% of the Second loan)

I am wondering because I recently had Chase dig their heels in and demand a deficiency for the second--it was a purchase money loan too. How do I get around that? Will they take 40%?

My thinking was to present the 70% / 42% scenario to AHMSI first and wait, if they approved it, then I would present it to Chase.

I am usnure if I am pursuing this the right way. I have another scenario very similar and wondering what to do. Superstars--I need your help.

Replies

Steve Early October 9, 2010 at 6:03am

Jeff:

Other people may have better suggestions but I'm not sure I would approach it that way. I would go to the first and start the short sale with them - during the course of the discussions tell them there is a second and ask them how much they will offer the second to release their lien. My guess is that it won't exceed $3,000.

The offer of $350,000 really needs to be presented to the first lien to see if they will approve the short sale. If they do, then the second lien gets $3,000. Now the question is: will the 2nd lien go away for $3,000? Probably not, but since they are in second position, all they can do is ask for cash from the seller at closing or demand they sign a promissory note or a combination of the two. If your seller can't/won't meet the demands of the second lien holder, then everybody will get nothing when the house is foreclosed on.

We have had second lien holders accept the cash from the first and slink away, and we have had others demand the seller bring $1,500 in cash and sign a $1,500 promissory note on up to demanding the seller sign a $70,000 promissory note.

It's like a box of chocolates. You never know what you're gonna get.
Jeff Pereyda October 8, 2010 at 4:53am

Thank you Kimberley. I will take your input seriously. I am frustrated, and I am sure many can identify, but I want to do the best for the seller. Yes, I am very curious what other Superstars have in their repetoire.
Jeff Pereyda October 8, 2010 at 4:52am

Kimberley Kelly said:
For me, Chase is very tough. They will want cash and probably a note to release that 2nd, and even then, they may not release their right to pursue. But..an unsecured note is better than the 2nd, so your Seller may sign one. I have found that with 2 loans, different servicers, I have had to present both with entire packages at the same time. Interested to hear other responses.
Kimberley Kelly October 7, 2010 at 12:25pm

For me, Chase is very tough. They will want cash and probably a note to release that 2nd, and even then, they may not release their right to pursue. But..an unsecured note is better than the 2nd, so your Seller may sign one. I have found that with 2 loans, different servicers, I have had to present both with entire packages at the same time. Interested to hear other responses.