One home, 2 mortgages each with different names, one name on deed

Foreclosures, Short Sales, Tax Foreclosures
1

I’ve been doing short sales for a while but am puzzled by a discussion that I had recently with a prospect and am not sure how to proceed. The gentleman that I spoke with cannot afford to keep paying on the mortgage of his son’s property and is upside-down on the property (this gentleman is the sole borrower on the 1st mortgage). This gentleman’s son committed suicide shortly after going through a divorce. The deceased son’s ex-wife inherited the property and has a second mortgage on the property in her name only. Both she and her former father-in-law would like to do a short sale on the property. This is where it gets strange - I realize this gentleman is obligated to the first bank because he signed that note but the ex-daughter-in-law is the only one on the deed to the house. She is willing to go along with whatever needs to be done to get the property gone. I also realize that both notes must be negotiated down for the sale to occur however, whose financial information do I provide to the second lienholder? Maybe I’m too close to this to see it clearly but right now I’m confused. Can someone help me? Thank you.

2

Psreis,

It has been my experience that in this situation you need to send in only the borrower’s information. Sending in both may only complicate things. I work in an office of short sale negotiators and one of the agents just worked several files in which the first and second had different borrowers. He submitted only the the financial information of the borrower or borrowers on that particular loan and completed a successful short sale.

Hope this helps!

Good Luck!

3

Psreis,
I’ve had this situation time and time again. I get ALL names and ALL signatures and send in a copy of the deed too. If the bank that has the note with him, pulls info and finds just the daughter in law on the deed, then they may come back at you and say, GET her sign off too. She is the only one REALLY who can sell the house as she’s on the deed, however it’s safe to get all signatures and then write up a note with your submission about the situation.