I have a lady who called on one of my “avoid foreclose” signs. She is going into her fourth month without a payment and has 2 mortgages on the property. She owes 80k on the first 25k on the second. The condo is worth about 105k. She told me the first bank was willing to accept a short sale. How does a short sale work with 2 liens on the property?
If I want to offer 65k, do I send purchase agreements to both banks? Will the first bank contact the second bank and work something out?
She called this evening. I plan on running out tomorrow to put the house under contract, is there anything I should add or change on the contract do to this situation?
You will need to negotiate with both banks seperately, second mortgage usually settles for pennies on the dollar because it is wiped out if property goes for auction . You will need to ask for short sale package from the banks. There is a process which you need to understand, it involves Broker Price Opinion (BPO), details on hardship, condition of the property and other things.
Hope this helps.
This should help. I am currently working a deal with two liens also. Chase is primary and CW is secondary. Chase payoff is $194,790.41 and CW is $45k.
I am offering Chase a payoff of $145k and CW a payoff of $1k.
Before CW will accept my offer of $1k they want to see Chase accept my offer first. I make one SS packet that I send to both banks. The only difference between the two is the offer letter.
If you would like to see my notes on a deal I am currently working with Chase go to the link in my signature. It’s under Current Deals. This one had two liens also. I already have the second down to $1k. I’m still negotiating with Chase on the primary.