Quick question for you.
The second mortgage company wants to know how much I am offering to the first but the negotiations haven’t really started yet. I mean obviously I am lowballing to leave room for negotiation. What do you do in this circumstance?
Do you actually tell the 2nd how much the first is getting? Or what would you tell them? I know once I tell him how much I am offering the 1st he will get annoyed and say thats way too low and won’t want to negotiate. Any suggestions would be great
Tell them that you would be happy to discuss your own finances with them, but you will not discuss the other bank’s finances. Nor will you discuss their finances with anyone who asks you about the negotiations concerning the second.
That when you do business with other people, you respect their right to privacy.
thanks for the response I will try that. He claims “they cannot start negotiating until they know what the first is getting” which obviously is bull and a typical loss mitigator lie. What I’m wondering though is, would it be bad idea to just tell the second mortgage company I will be offering the first mortgage company something around $xxxx and tell him something higher than what I am actually offering the first mortgage company just to make him happy? or could that come back later on to be problem?
Also I’m assuming the 2nd will want a preliminary HUD, do you just not show anything for the 1st mortgage on the HUD that they get? or do you have to?
I would call the first and just ask them what is the typical amount they let the 2nd recieve. Most senior lien holders wont allow the second to recieve more than $2500. Once the first tells you then just tell the second that. They are going to want to see a HUD eventually anyway so they will know then.
I would try to be as honest as possible because if they feel like they can’t trust you then you will find that it is even harder to deal with them. LM and Negotiators are constanly “lied” to when it comes to investors and are used to dealing with people that make empty promises.
Hope this helps.
I mean, I wouldn’t lie to the second mortgage company about what I am going to offer them, but I wouldn’t tell them the real amount that I am going to offer the 1st mortgage company either you, you think that is bad idea?
If I’m negotiating just the second lien, I will not continue the SPO process unless there is a payoff/negotiation in process with the 1st- we most of the time know the balance on the 1st to see what our equity position would be if the property went into foreclosure- would the 2nd lose everything or would it be better to payoff the 1st and then foreclose as the second (if enough equity in property to payoff first). When it gets time to complete an analysis for mgmt, MI, or investor approval I have to have the payoff to the first whether in full or the amount settled-- I don’t care what fees the 1st allowed, my bank might not allow certain fees that other investors will. At my company if we’re the first we typically offer the 2nd $3000 to release and request the same in most circumstances. We want to get as close to Fair Market Value as possible and if the 1st is accepting a low offer we could counter higher saying more than $3000 would be required to approve the short sale.
The HUD has to match up every time I look at it- from the buyers name to fees approved to payoffs to 1st & 2nd. I had three transactions last month from double closings that got denied & the SPO cancelled because the wrong HUD had been mistakenly sent.
Also, I’m finding that many mortgage insurance companies are coming back with requirements that the borrower sign a promissory note. I’ve lost probably five deals this week alone when the borrower refused.
I have heard of some banks asking buyers to sign promissary notes recently too and they refused. Seems kind of silly because from what I have heard and read that the bank can still come after the homeowner after foreclosure and they are much more likely to come after them for the full amount than a discounted amout.
Also, the promissary notes that I have heard or are all unsecured…so in reality would the HO actually even have to make the payments?