i’m working on a ss for 2nd mortgage.
client has 80/20. 1st mortgage will be paid off in its entirety.
2nd mortgage has asked me to fill out a SS packet.
the letter states that homeowner will be responsible for paying the deficiency remaining on hte balance.
so if homeowner owes 50k on 2nd and 22k is offered, does that mean that homeowner will be responsible for paying the remaining 28K???
in addition to this, they want this letter notorized. the bank is HSBC.
I understand about building a compelling packet and showing the HOs are as broke as they come with no assets, as is the case.
Lender is asking for HO to notarize form saying they will be responsible for deficiency balance. I don’t think I want the HO to sign and notarize this form. Will they accept a SS if that form is not sign/notarized. Another thing I can do is have HO sign form and cross out that clause.
Has anyone had experience with banks wanting to have HO commit themselves to deficiency balance???
From what I know, they want that form signed if the financials show the HO’s can afford it. So take another look at the financial as the loss mitigator might. If they are employed or are purchasing another house, it looks to the LM that they can help pay back any deficiencies.
HSBC is one of the absolute worst about this. It has nothing to do with if the HO can afford it. It also has nothing to do with building a powerful SS package.
I’ve been told more than once, “we will just garnish wages”. Whenever one of the reps starts talking defiency judgements, I ask them…“Please tell me, what would be more harmful to the homeowner, the SS or the foreclosure?” “Well of course the foreclosure”. Ok then, now we are on the same page.
HSBC will release the satisfaction of mortgage, but they will not release the note.
I don’t think they can garnish wages if they havent signed a promissory note.
I told the bank that after the short sale is approved and the lender is paid the client is going to file chapter 7, which will wash away and deficiency note anyway, but the client is holding back until the house closes and the lender gets the most of their money now.
Yes they could garnish wages. If the lender files a judgement before the owner files bankrupcy. The “note” was signed with the mortgage when originally purchased. Most companies will not waste the time, but HSBC loves to state their intentions.
This is from HSBC… also signed buy the seller at closing
HOUSEHOLD MORTGAGE SERVICES AGREES TO A SETTLEMENT (RELEASE OF DEED/MORTGAGE ONLY)
HSBC Mortgage Servcies will retain the note on this loan. The customer shall be responsible for any deficiency remaining on the balance. All terms of the origianl note shall remain in force.
Special notes/conditions:
The realtors commission shall not exceed 5 percent(%). No proceeds shall go to the seller(our customer) or buyer. Any excess proceeds shall be forwarded to Household Mortgage Servcies.
REO, greenqueen, anyone…
On how many occasions did you deal with HSBC on a short sale?
Did you get HSBC to ever waive the deficiency and take it off their approval letter?
I was told by Cliff at HSBC that they have a standard approval letter they ALWAYS USE which states:
HOUSEHOLD MORTGAGE SERVICES AGREES TO A SETTLEMENT (RELEASE OF DEED/MORTGAGE ONLY)
HSBC Mortgage Servcies will retain the note on this loan. The customer shall be responsible for any deficiency remaining on the balance. All terms of the origianl note shall remain in force.
Has anyone successfully had HSBC back down from the above deficiency language? If so, how? Did you talk to a manager/supervisor…?