From what I’ve come to discover, short-sales work well because when the 1st position finalizes a foreclosure, the 2nd will get next to nothing, if even anything, thus they are very likely to negotiate. So, what’s the case when the same lender has both 1st and 2nd motgages? Thanks.
Dean
These can still be discounted. They will be worked in different departments and the 2nd may not even know that the 1st is with their company
You simply submit the ss package to both lenders. They will have different Loss mitigators anyway. Also, it depends on what kind of loan the 2nd is. If it is a closed 2nd mortgage, the lender may have already sent it to their insurance company and you’ll have to negotiate with them. If it is a HELOC, it is most certainly with a totally separate servicer and you’ll have to negotiate with them.
No, in this case both lenders are the same lender. Countrywide has both the 1st and 2nd loans on a defaulted house I found. So, I’m sitting there thinking, how will I get the second to negotiate? “Hey, Countrywide, you have a 2nd mortgage, but Countrywide has the 1st. If you don’t negotiate with me, then Countrywide will just foreclose and you won’t get anything in the end”. See how that doesn’t make sense?
Actually it is sometimes easier when both mortgages are held by the same lender. However, is Countrywide the lender or the servicer for both loans. It may be possible that they are only servicing one if not both loans and not the actual lender. In that case they will have to get authorization to do a short sale.
I would submit the package for the first mortgage first. See if you can get them to accept an acceptable discount and then break the news that they hold the second as well. This has worked very well for me in the past.
This will have one negotiator assigned to both files. The 2nd will receive $3000 unless the MI/investor on the 2nd/HELOC requires that it receive more. Several of the mortgage insurance companies are really pushing for 10-15% (on the HELOC or 2nd mortgage) of the loan balance from net proceeds before they’ll approve the short sale.
With the money banks are losing around the country, more & more investors are tightening their belts when it comes to the loss from a short sale. A lot more files recently have had to go to the investor to approve as a result which lengthens the time the whole process takes.
Ok, you may want to check with the LM if the property had some kind of PMI triggered when the 2nd was taken out. More than 80% ltv with a 1st and 2nd may have had a PMI stip on the 2nd. In this case, you’ll have to deal with the insurer for both the loans. This will take a fair amount of digging as the LM may not even know to look until they get to that page on their checklist.