Closing Question
If I have different HUD-1's prepared for both the 1st and 2nd mortgage holders, each will have different sale prices. The one to the 1st mortgage holder will reflect the Short Sale price for both the 1st and the 2nd, and the one to the 2nd mortgage holder will reflect full payoff of the 1st and the short sale price for the 2nd. I understand that these are just pre-lim HUD-1's, but I'm wondering, won't the 2nd have a baby when the final HUD-1 shows that I got the 1st to discount and I didn't reflect it on their HUD-1?
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You should know that the mortgagees talk to each other. If it discovered that you have materially misrepresented the proposed transaction, and signed the HUD1 document as being accurate, they could kill the deal, or, if you've already closed, come after you for some $$$$.
It's easier to be honest then rewrite a wrongdoing.
So on the HUD-1 to the 2nd morgage holder I should show the short payoff to the 1st?
I've only gotten a verbal from the 1st that they accepted my short offer. They won't give me anything in writing until I supply them with a release of lien from the 2nd.
Since I don't have it in writing, I can't be sure that they won't change thier mind, right?
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Hi Swetbak,
I always send my HUD-1's out with my SS pacakge, therefore, no deals have been made then. I also never tell the 1st mortgage that there is a 2nd, unless they ask. As SSPRO said, banks do sometimes talk, but it is not my job to do the talking for them.
I provide the 1st with a HUD-1 showing them only. Dont forget to check any back and or current RE taxes and list them on the HUD.
I provide the 2nd with a HUD showing only them on it at first. Sometimes I get a call from the lender instructing me that they want to see the payoff from the first. In many cases if you present a solid SS presentation, and spell out all the debt against the property, the 2nd will live with the HUD showing only them on it. If they do ask for a HUD with the 1st on it as well, if I do not have anything in writing from the first about the discount, then I will list the actual full payoff on the HUD. This could be construed as playing word games, but if it is not in writing, it is NOT a deal!
So Paul, go ahead and move forward. If the 2nd throws you a curve ball, throw it back and get the game rolling! LIFE, BUSINESS, and REAL ESTATE . . . it is all a game!
Best of Success!
BAMZ
I like BAMZ's mental attitude. It is a game and you got to have fun playing it or you are short term for this business.
Thanks Guys for the input. I'll be staying the course... until things change.
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