Replies to This Discussion

Permalink Reply by Brigitte Powell on September 13, 2010 at 6:21am

I would ask the Seller want he/she wants to do. Did Seller get advice of an attorney before rejecting the promisory note requirement? I doubt that you can "tie down" better terms without a contract. I know how exhasperated you feel. Did you try and negotiate the 25K to a lesser amount (like half or even 10,000) Foreclosure leaves a blacker mark than SS. What about deed in lieu? Have they applied for that? Do you know who the MI company is? If you know, then call and call until you get someone to talk to. What you and I think is crazy they think of as "negotiating" :-). You must know what the Seller is willing to do to get the monkey of his/her back, otherwise you are "p...... in the wind" If Seller is totally refusing to sign a note, then see if the servicer will do a deed in lieu or ......you need to walk away and save your sanity :-).

Permalink Reply by joe beauchamp on September 13, 2010 at 8:20am

I have not run into the WF IM story - WF is fairly decent so I suspect that they don't play that game. BofA uses MI as the big bad boogie man - frequently when there is no MI! I say this because it helps set the framework of where you are.

As Brigitte suggests, negotiating a different amount, finding what the seller claims (this can change and also depends upon how you ask) is one excellent path to go down.

I go over the info with my seller - frequently they don't bother to do a decent financial worksheet or hardship letter. I get this corrected and throw it at the "MI" company. Frequently they back down. They now see that the seller has no extra cash and has no means to really carry a note.

On the other hand, they look at the credit report. Is this seller dumping a house and making payments on all his credit cards, buying a new car, etc.? Then it ain't gonna change - he can pay and they want him to. Also, if he is dead broke, BK is an obvious choice after the fact so a note would mean nothing - implying that he has funding and doesn't see BK as reasonable. (Assuming that his position is not simply emotional, as many can be.)

BofA hides the MI as much as possible. This is illegal to keep this from the seller - in essence, they are saying "write a note leaving the recipient blank". Oh yeah? And who is this recipient, your Uncle Louie? How are you legally demanding payment to a secret entity? Have you heard of Truth in Lending?

You may find that MI is very reasonable and something is askew. Less likely with WF than with BofA, where I expect everything to be askew and occasionally get pleasantly surprised when something is not.

Finally, you might approach the investor. I have had no luck with this on the few times that I tried, even though this weekend someone on this forum said that I should get great response like she does. So, that could be a possibility - they lose money if the deal dies. If there is no MI and the bank is lying, they lose the money. If there is an MI, then the MI loses most of the money. With that as your understanding, you might get somewhere.

I have found that Fannie Mae, as an investor, has deadheads for reps - their donuts are much more important than the taxpayer money going down the tube. So, I cannot say that what makes sense as a first line of approach really should be taken.

Hope that helps..

Permalink Reply by Brigitte Powell on September 13, 2010 at 8:49am

GREAT advice Joe!

Permalink Reply by Jim Schneider on November 5, 2010 at 6:11am

I am just about to close a short sale, initially they asked for a promisory note, the deal fell apart, when we found a new buyer, no promissory note. I'd have a frank discussion with the seller, remember, he likely already has a promissory note for the entire mortgage, he's just switching it for a much smaller unsecured note.