We had a surprise just before closing on what we thought was a traditional sale. We found out the seller had a loan modification in 2015 that include and $80,000 junior lien from HUD. This made the payoff about $20,000 short to close and HUD would have to agree to take $60,000 to $65,000 and release the lien and note. According to the seller's attorney, HUD doesn't negotiate. I don't believe that because after 500+ closed short sales I've never experienced a lender that would not work with us.
QUESTION: Has anyone in SuperStar land negotiated a short sale with HUD as the junior lien holder and will they negotiate?
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Also doesn't understand the comment re: traditional sale. An FHA insured loan must be submitted for review of the seller's eligibility to the HUD PFS Streamlined or Standard short sale program. Would appear a preliminary title search nor full review of your liens prior to submitting an offer was not done. If the seller is approved in the HUD PFS program a HUD Preforeclosure Eligibility will be issue for a period of 120 days.
The lien is called an FHA HUD 2nd modification. HUD does negotiate. HUDS rules allow $2,500.00 to be used towards the 2nd liens. The FHA stand alone 2nd's are serviced by someone other than the servicing company for the HUD. The 1st servicer will be looking for you to provide written approval from the 2nd before they will reissue an amended approval thru the HUD PFS program.
That's likely a partial claim. They don't negotiate. Servicer should pay it in full if they approve PFS. I've been involved in 50+ situations with partial claims.
Brett@ishortrsalenow.com
310-564-6389
www.ishortsalenow.com
Was it junior to a mortgage or to realty taxes, IRS Liens ? Do you know if the $80,000 was a Reverse Mortgage Lien ?