2nd Is Foreclosing 1st Isn't Yet?
Hello Everyone! I have a question about how to start the short sale procedure when a property has a 1st and 2nd mortgage, but the 2nd mortgage is the foreclosing lien and the 1st has not officially filed yet. I am assuming that because the 1st is delinquent and has contacted me and is ready for my package, I would proceed as normal. Get all the required paper work including a sales contract and fax it to loss mit. at the 1st and then put together a letter of intent to the 2nd offering them what I want to offer on their 2nd mortgage. I just wanted to make sure I wasn't off base in thinkng this. This situation is a first for me. However I have seen on here that some 1st lien holders want to limit what the 2nd gets. Should I find this out before faxing my letter of intent to the 2nd or should I just fax them my offer? As a side note, both mortgages are with the same company. Does this have any affect on how I should proceed? Thank you
Jon
Hi Jon,
This is an interesting one. Generally if the 2nd is foreclosing, the 1st will not file. If the 2nd forecloses, the 1st will be paid off in full. Do to the fact that these notes are with the same bank, this becomes very interesting!
If they are open to your short request, move forward with it. Make sure that you present them with a sounds presentation. chances are you will probably have a better chance shorting one or the other if they are with the same bank.
BAMZ
Read what the ShortSalePro had to say about a similar example. This will help you in more detail!
http://www.thecreativeinvestor.com/ViewTopic20994-35-4.html
BAMZ
Just got a call back and the first denied a short and said the 2nd had to take the hit.
I'm trying to learn from this. Would you mind sharing the numbers on this deal?
Pooh
Hello
Thanks for the question. The house is worth about $150,000 - $160,000 if in good condition and needs some repairs, a roof leak, leaning porch, peeling paint etc... The seller owes $200,000. It is an old farm house that he got a second on to expand and remodel. The first is about $98,000 and the second $102,000 . The first feels that they should get a full pay off because even with repairs they feel it's worth taking the house back. The second is being difficult at the moment. But I am still talking to them. I will keep you up dated.