I am working on a short sale deal with a 1st mortgage through Novastar and a 2nd through Beneficial. The 1st mortgage holder seems anxious to deal(pending sale date on Nov. 17), but they mention that they don’t want the 2nd to get any money if they approve a short sale. Beneficial doesn’t want to deal, not because the loan is still current, but because they claim that they will still get paid their full amount from the proceeds of the sale since they didn’t file the lawsuit for foreclosure. I am not familiar with this fact, so could someone explain and maybe offer some advice to get this deal done. The 2nd is only about 7k, which may be worth paying off in advance of the short sale to save 100k of profit in the long run. Thanks in advance.
My understanding is that the 2nd only gets the left overs when the house is sold. If the 1st is sold short, there is nothing for the 2nd. Beneficial apparently would rather take their chances at aution. My guess is that if the 2nd is only 7k, it may benefit you to pay it off in full to protect future profits.
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Advice is only worth what you pay for i ;D
The problem is that Beneficial thinks they will get their 7k no matter what the property sells for which is incorrect. I also explored the possibility of paying the 2nd off in full myself, given that there is so much profit at stake. But the first mtg holder basically said they won’t approve the short sale if the 2nd is settled before the sale date.
The transaction I’m currently working is with Beneficial and my experience to date is that they know better. I’m also guessing that the first is bluffing to see what you’ll do. Sometimes you have to walk away.
So is what the 1st mtg holder telling me pretty much BS to have the 2nd take a short sale too? My thought is that it might be worth paying off the 2nd even if it’s the full amount if it is the only obstacle in the way of a short sale with the 1st. Novastar is willing to deal and understand that everyone is going to lose out(even them) if it goes to sale instead of working something out.
I don’t know that they’re completely full of bull spit. In thinking about it a little more, they’ll probably making sure that they get every dime that is to be had. 99.9% of the time a mortgage holder will not approve a short sale and allow the seller any money. It wouldn’t be a stretch for Novastar <?> to take that same position with the 2nd.
In other words, if they get screwed on the deal, everybody gets screwed.
Here’s an update. I finally got ahold of the right people at Beneficial and I am sending them the sales agreement and the HUD-1 statement. I will send one set to the 1st and one set to the 2nd, so at least now it’s down to brass tacks and start talking prices.
Robbob320,
Did your short sale negotiation with NovaStar work out OK? I’m in the final stages of a very long negotiation with them, but we’re still about $10K apart and no one’s budging. I’d appreciate any endgame advice you, or anyone else who’s dealt with them, might be able to offer.
Thanks!
Rick
215.504.2274
If Robbob doesn’t reply soon you might want to just shoot him an email as he might get your inquiry faster…BTW: GL with your deal.