Both lenders are leaving it up to me to figure it out.
The first lender (Aurora) approve my S.S. offer for 220K bal. was 336K.
I offered the 2nd (C.W.) 2K on a 63K bal. which they verbally counter to 3K.
I ask the 2nd to put it in writing so I can show it to the 1st lender and they said they will not put it in writing. Btw don’t I need a payoff letter from 2nd for my attorney and title co accepting the 3K?
My problem is that the 1st does now allow me to pay the 2nd more than 2K on the HUD.
I offer to send the 2nd 1K out of closing and pay 2K on the HUD at closing but the 2nd wants it all on the HUD. What are my options or is this deal dead after all the time and work invested.
Type slow this is my 1st S.S.
Thank you for your answers.
There’s no reason you can’t add your $1K to the HUD. It will just show that the money is coming from you, rather than from Aurora. So the HUD should show 2nd getting $2k from Aurora and $1k from you.
The 2nd will have to provide title with a release of lien. Ask them specifially for “release of lien.” Technically the 2nd can’t put their “acceptance” of your shorted offer in writing - something to do with the 2nd markets and insurers. However, a release of lien is done all the time. Depending on how moody the LM is, they may send the release directly to escrow. So just get a copy of it from title when it comes in.
Warning - the release of lien MAY contain some sneaky verbiage like, “Release of lien is granted for $3K, but borrower understands that he/she is still fully liable for the entire amount of the original loan amount…” Then, they may try to sneak in an unsecured note at title for you to sign that turns the balance of the $63K into an unsecured, revolving debt that you will have to continue paying even after the short sale is done.
They are not that sneaky. The LM already told me about the unsecured note but I understood that it was for the seller to sign not the buyer (Me).
I will clarify it since you mention it.
And try to sneak the 1k on the HUD and see what happens.
Thanks
Yes, sorry the note is for the seller. Sucks for them, but hopefully not a show stopper. I had a distressed ho refuse to sign the note at escrow, but it didn’t blow the deal. Still, better that there are no surprises.
HO really hasn’t too many options. If they refuse to sign and the home goes to auction they will still get a deficiency judgement against them. If they are going to file bk then they can include this. I had a 2nd attach the wages of an HO in the middle of the SS process, but they still gave me a letter to release the lien.
Mannydoall, I agree w/ g whiz and Deal Hunter totally. I would also add that if you intend to do a lot. or any more shorts, for that matter, you’d gain by learning to work the bank’s mojo back on them. Example; one of several points I make in Special Provisions, is regarding that D Judgement or Secured/Unsecured note they like to ease in on the seller@ close of escrow, its NOT mandatory and can be eliminated contractually. Additionally, most lender’s loss mit personell will get to a point of trying to rush you to close once they’ve smelled blood,or, money in this case. If you’ve covered all your bases to this point this becomes a great time to do the stuff most people think are not an option, like switching buyers, working the payoff to the 2nd more aggressivly on your net sheet, or even requiring lenders to pay a 5% or less commish figure to you via the net sheet.
Are you implying that there is still room to negotiate
after the approval has come in. The 1st lender said it was going to
foreclosure the sale if I make any changes to the original approval.
It seem that they have the last word so how do they expect me to
give the 2nd an additional 1k.
Please break down your last reply for me. It’s a little over my head. I intend to get better at this with your help.
Thanks