Replies to This Discussion

Permalink Reply by Pattilynn Guilford on May 20, 2013 at 4:16am

What is the offer?

How much is owed the first?

How much is owed the second?

Permalink Reply by Barbara A. Reagan on May 20, 2013 at 4:24am

The listing agent has been less than forthcoming with information - it is almost like she doesn't really know much of anything and, of course, I cannot call because I do not have authorization to talk directly to the lender.  The best that I can figure out, the owner purchased the house in 2004 using NVR Mortgage and paid $251,000 for the house.  I am assuming that her loan was sold to BofA soon after, since I know NVR Mortgage doesn't service the loans.  The second I am assuming is a HELOC with Suntrust.  Our offer is currently $253K but having the seller pay $7K in closing costs.  Unsure what the amount of the second is, but based on the email I am assuming that the first is able to be made whole, which is the reason why they are saying that this is a traditional sale.  But since I have never gotten this, and the listing agent seems to be wholly in the dark, and has an i-don't-care attitude, I am trying to figure out how to advise my buyer.  Thanks for the input.

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on May 20, 2013 at 4:34am

Barbara - I'll bet the original loan from NVR / BofA was an 80/20 so that loan was likely about $201,000 and the HELOC was likely the $50,000 plus whatever else they added into it.  IF that's the case and based on your offer, the first would absolutely become whole in this transaction with about $20K surplus available to pay towards the 2nd.  I think the problem is going to be the 2nd not wanting to take such a loss and will want more surplus from the payoff of the 1st - they (Suntrust) may question / deny the closing cost contribution, etc.

If the Listing Agent doesn't know, doesn't care about this short sale, the best advice you can give your client is to find another property.

What City / State ?

 

Permalink Reply by Pattilynn Guilford on May 20, 2013 at 4:34am

Well, the first is not the 'seller' now so the $7K in closing costs will come from the homeowner.

Suntrust may do a 'short payoff' which means they will settle the debt. The first will not be giving the 2nd any money in a non-short sale so those figures needed to be factored in.

If you can't get the LA to provide a better update - talk to you broker and ask that he/she calls the LA's broker to discuss how to get this to closing.

Agree with Thom - full disclosure.

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on May 20, 2013 at 4:23am

It sounds like the sales price for the property covers the payoff of the 1st in full.  Just get a payoff demand for the 1st.  The good news is you won't have to work with REDC / Auction.com !

As for the 2nd, if it's a short sale you will have to go through the short sale process with Suntrust.  It doesn't matter that the 1st is being paid in full - they are not part of the short sale and do not have to approve anything.  If the 2nd doesn't want to do the short sale the only choice they have is to foreclose - and that will be subject to the 1st mortgage (Suntrust will have to assume / payoff the 1st if Suntrust forecloses).  Remember the 2nd is subordinated to the 1st - (that's why it's called a 2nd)

I don't agree with Megan's recommendation to keep the actual facts from Suntrust.  I suggest the Listing Agent contact Suntrust, provides the payoff demand from BofA along with the estimated HUD based on the sales price to Suntrust.  It will be clear who's getting paid what and Suntrust can make a decision about the short sale.

Best of luck !

Permalink Reply by Barbara A. Reagan on May 20, 2013 at 4:51am

Thanks everyone for the responses.  Now I am much clearer on what we need to do.  We are requesting that the listing agent find out the payoff from the first w/BofA and that will tell us just how much will be available to the second with Suntrust.  I am also advising the buyer that we may need to reduce or eliminate the closing costs assistance if needed.  So we will have to see just what happens from this point on.  Thanks for all the great responses so quickly.