I have had several short sales approved, but I am running into my first deal with a first and second mortgage with different lenders. The first lender is Countrywide and the second is Wilshire. I know that CW will do a forgiveness in the form of a 1099, however, Wilshire will pursue a deficiency judgment. Is there a way that I can get CW to accept a short sale without reducing the second mortgage? Perhaps there is a better way to handle this issue that I am not thinking of.
Also, in general, what are other shortsalers doing out there when the lender mandates a deficiency judgment? Is it beneficial for the homeowner to even do a short sale in the event of a deficiency judgment? Thanks in advance for your help with this!
Good Morning,
Generally I have found 2nd position lenders deficiency judgements to be a pipe dream for them. I have found they hold out till the court house steps till they negotiate, because in a few moments they will lose all.
I have found that if the home owner does not agree to the judgement/demand then off to the court house steps you go also. In many cases the bank does is not set up to handle this properly and their default mechanism is to let it go to the auction/foreclosure.
Good info…Does this information apply to all second loans attempting to be shortsaled or just first and seconds with different lenders?
If you think about this for a second I am sure you will see that getting your collateral back (as would be the case where the 1st and 2nd TD are held by the same lender) is infinitely better than not getting your collateral back (as would be the case where the 2nd TD is held by a different lender).
‘Negotiating’ with a bank is often… where the 1st and 2nd TD are held by different lenders… nothing more than telling them that you have a boatload of deals on your plate, that you have no time to waste, you have a buyer, you’re ready to close, take it or leave it and don’t bother to call you back.
It also helps if all that is true.
The more you call a lender, the more they think you are desperate to deal.
Wilshire is one of the best banks to work with you can negotiate the 1099 with them as well. Theres ways around that we just bought 14 seconds from them last week. All of them were in default and we got them Really cheap. Hammer them and hit em hard…
God is right! I have owned 2nd position notes when 1st were foreclosed on and as much as I would have loved to collect, it is just what he said, a pipe dream. Offer the 2nd 10 cents on the dollar and give them a short time frame; 5 business days to respond. If they know what’s good for them, as I did, they will take it. Just my two cents.
if the 2nd is a purchase money (used to buy the house originally not a refi or add on after the fact… + this is the persons primary residence) the bank can not come after you. (this is California rules)
if the 2nd is refi or added on after purchase: then you need to negotiate… ck with your BK atty (they usually have negotiating dept)