Second Mortgage Company Help Please
I have a SS going with 2 mortgage holders. 1st mtg company did appraisal and accepted offer, second wants a copy of the appraisal and the net sheet from the number 1 mtg company and wants me to have them fax it over to them.
Should I do this and will this hurt me in any way?
Thank you
Dave
Once you have reason to believe that the first mortgagee would entertain a short sale, you have to get the second lienholder to commit to a payoff. Then, once you've nailed down the second... you should approach the first.
If your offer and HUD 1 to the first doesn't indicate a junior payoff.... but the revised HUD1 reflects the junior lien payoff they may rescind their approval...
Rule of thumb: Once you have prequalified the feasibility of a short... you should work the lienholders in reverse order. What good is a first mortgagee's approval if the juniors won't play ball... or you have to go back to the senior lienholder, hat in hand, asking them to consider accepting even less than they had previously agreed to accept?
[addsig]
I did try working in reverse but it took SO long for #2 to even respond. One was already a done deal before 2 responded. The first had it's FC date already set.
The HUD 1 I sent states nothing about the junior.
So SSP, would you give #2 the appraisal and #1's Net sheet?
If yes, What could happen?
If No, What do I do next?
I already have the house sold as long as the numbers for #2 come in as offered.
Depends upon the perceived equity.
The key to any short sale negotiation is the as-is, FMV. What is the appraisal's indicated value?
The second could reject the offer... and demand more than you have offered.... but if that happens, the first mortgagee would probably kill the deal (rightly so) due to non disclosure once they see the real HUD1. That would be a mess.
If I were in your shoes, you might simply try to buy the junior for whatever you can negotiate.
The appraisal came in at 158K as-is and there is about 30K of work. FMV 175K - 195K are the comps. I am paying #1 139,500 of a 144K bal, I offered #2 3K of their 13K bal.
#2 states she cannot do ANYTHING without that information.
Thank You for the advice so far.
In this case, there appears to be an excess of $18K between FMV, and first mortgage payoff.
If the junior were to pursue payment in full.... they would have to join in the foreclosure, or initiate a new lawsuit which would cost several thousand dollars and provide no guarantee that they would be made whole.
The discount on the first is so small, that I doubt that they would balk at some $$$ paid to the junior.
Submit the appraisal and HUD 1, and make certain that your argument is compelling so that they will see your offer as a bird in the hand...
(I would denigrate the appraisal as 'unrealistic and overly optimistic')
They may well reject your offer... so be willing to pay more, &/or buy the mortgage for cash... via an assignment. That would facilitate the proposed transaction.