I haven’t done a short where BofA is the 2nd since I first heard about this rumor.
Can anyone confirm that BofA is taking 5% instead of 10% and sometimes the ridiculous 20% I’ve been required to pay before?
Yes. It is true. BOA is accepting 5%, but of the net amount that the first is receiving! So, first is netting $100,000. BOA is wanting $5,000. How many lenders in first are going to want to pay them that???
oh, that’s what they are doing?
Thanks for clarifying that. As you can imagine I was assuming 5% of their 2nd amount. Now that makes more sense. I agree with you that 1st positions are not going to want to do that. I still haven’t had a short where BofA is the 2nd, only when they are the 1st so now I know what to expect if I do get one when they are the 2nd.
Thanks
BOA will take less than 5% we have paid them as low as $1,000 for a 2nd. It is the 1st mortgage that usually dictates what the 2nd will receive.
Well down in FL BOA is looking for 30-50% on several short sale deals i and some others have tried. I was looking at condo’s that were bought for 200-300K with BOA on the 2nd at around 30-50K and they never settle for less than 30% with many times says 50%.
Hey some times that’s the way the dice lands. 2nds don’t always take what the 1sts want to give them, but that is usually the way it is. You have to play hard ball with them. Unless the bank has a reason to put up a fight like their lien is worth foreclosing for. Most of the time that is not the case.
From what I hear in SoFl, less than 20% of all short sales are closing. Banks are being tough down here for some reason.
Don’t sweat it banks are tough everywhere.
ya, I’m sure we’re all aware of that. That wasn’t the question.
as you can see here, the question was already answered.
That may be short sale girls experience but not mine. BOA will accept less than 5% of the net the 1st is getting. They do not have a standard procedure where they will take 5% of the net or the deal is dead. I have 8 short sales with BOA right now and 2 that are approved. The 1 property they are accepting $1,000 and the 1st is getting $125,500.00 on a two family here in Jersey. And if you have been require to pay 10% or even 20% on the regular to 2nd mortgages you are doing something wrong in your short sale negotiations. The most we have ever paid for a 2nd lien is 5k. So I answered your question they way I think it should be answered.
We’re noticing the more the home is upside down the more flexible the 2nd usually is because they will get wiped if foreclosure goes through.
This is a general rule and investors behind the loans have input, the ability of the local area to recover faster to support values plays a part, and the strength of the offer, and sometimes what side of the bed your negotiator woke up on.
The states hit hard w/ serious drops in value have seen more flexibility in our experience (CA, NV, AZ).
We do loan mods too so we have a lot of data and lenders that are accepting settlements on the 2nds (we always try that first if homeowner has some cash to settle) are in states where values are so out of whack the lender knows it will take a while to recover so they’d rather take the writedown now.
Also, we’re seeing more flexibility w/ principal balance reductions now that the Toxic Asset Buyout Plan failed (as most of us knew it would) and lenders know they aren’t going to get bailed out of their toxic assets.
There is also the “shadow” inventory of houses (approx. 700k of them) lenders don’t want to dump on the market to further depress values.
These two factors in addition to the next wave of defaults (there are more people in default now with A paper loans than subprime) and the coming wave of commercial defaults ($2.5B in commercial loans coming due next year) all point to more flexibility on part of lenders.
Another bailout could continue to make them inflexible, but the natives are getting restless and could take to the streets so I think the banks are on their own and the flexibility in balance reductions and speed in which the 2nds are taking offers point in this direction.
I believe short sales will follow suit. I could be wrong but just reporting trends we are seeing.
Hope that helps.
I agree with REITVShow on this we are doing just over 40 short sales right now with BOA. They really don’t have a set in stone magic number that they work with. They may ask for that I really have no idea! I only deal with two people at that lender. It might be like that if you are only running one or two deals thru them I guess.