I have a deal and it has a 1st and 2nd and I am going to do a short sale and I need to provide the lender with a purchase agreement. Do I need to put the purchase amount enough to cover the payoff for the 2nd?(the negotiated amount)
I am doing my first short sale and it has a 1st and 2nd and both lenders are asking for a purchase contract but, I need clarification on how to do it. I know I only need one contract so, do I specify the amount of the 2nd that needs to be paid off? I hope this makes since…PLEASE HELP!
Just put the total amount on the contract.
When you submit your short sale package, detail it to the specific lender.
For example
Your short sale letter to Lender1 would offer $XXXX.
Lender2 Offer $XXXXX.
I would not do that just yet.
1st what type of loan is this?
2end What’s the Full Payoff of the First Mortgage?
3rd What’s the payoff of the second mortgage?
4th What is the appraisal amount of the property?
5th Now that you have both payoffs and the appraisal amount,
Send in an offer to the 1st lienholder that you think will satisfy the mortgage lender for a short sale if there is enough equity in the house without the 2end lien.
The second lien holder get’s $0 if it forecloses, so offer then $1000 - 2,000 if and after the 1st lienholder agrees to do a short sale.
You can finally settle a discount with the 1st lienholder and hopefully satisfy the 2end with the $1000 bucks and create alot more equity in the long run.
NOTE: Satisfy a full payoff with the 1st lienholder may be a better option for you rather then a short sale. You can still get the second lien for a small amount.
I know these tips are a little contridicting, but I’m just trying to open all the options that could happen for you.
Does this Help?
I will also ad that the first lien holder will typically not allow the second lien holder to get more than $x, regardless of what the pay-off is. If the first is taking a hit, they will not allow the second lien position to get too much. I’ve found that the first lien holder will start the negotiations at $500 for the second lien. These situations presents a great scenario for creating equity.
What is suggested to do if the 1st and 2nd lien holder are the same mortgage company?
My advice would be to treat the first and seconds separately. The Lender might sell off that second position even though the first(them) is foreclosing. I am working a short sale where 3 weeks after I had begun trying to neigotiating a s.s., then they tell me that the loan had been sold and it will be 3 weeks before the loan is officially transfered to the new lenders’ books. From experience I have seen it take another 7 days after the transfer before the loan is in the new lenders’ computer system. This deal is tight and I wanted to pick up the 1st sub-2 and now another month of arrears will be tacked on. After that it will be another 2 months before the proposal gets reviewed & closed(maybe). At a minimum I see my self losing at least 2 months arrears. Nothing short about a short sale.