Posted on: 23rd Mar, 2010 06:08 am
I'm having a difficult time finding any information on how to deal with short sales on cooperative properties. Plus, the unit in question has a second "mortgage" (they're not really called mortgages on a coop; it's a secured loan). The second is an equity line of credit. My client is under water. I know that the coop comes first, but how to deal with the 2 lenders? I'm awaiting more info when HAFA kicks in in April... Can anyone out there help?
hi paula!
welcome to forums!
as far as i know, after the short sale is complete, the primary lender's dues will be satisfied first. as far as the second mortgage lender is concerned, he will get in touch with the borrower and recover his dues from him/her. after a short sale, the second mortgage will become unsecured as there would be no collateral against the loan. thus, the second lender may even charge off the mortgage.
feel free to ask if you've further queries.
sussane
welcome to forums!
as far as i know, after the short sale is complete, the primary lender's dues will be satisfied first. as far as the second mortgage lender is concerned, he will get in touch with the borrower and recover his dues from him/her. after a short sale, the second mortgage will become unsecured as there would be no collateral against the loan. thus, the second lender may even charge off the mortgage.
feel free to ask if you've further queries.
sussane
Hi, Sussane - thank you for your reply. I guess my question is, how do you get the second lender to release the UCC lien prior to closing? My impression is that a foreclosure filed by the first lender would have to satisfy them only, but since a short sale has to be negotiated, does the first lender not need to satisfy the second lender's lien in some way?
Hi Paula,
The second loan is subordinate to the first loan. Therefore, the first lender does not have any obligation to satisfy the lien placed by the second lender. It is the borrower who would be responsible for paying off the second lender. If the borrower does not pay off the second loan, then the lender would have the rights to either charge off the account or garnish the wages of the borrower.
Take care.
The second loan is subordinate to the first loan. Therefore, the first lender does not have any obligation to satisfy the lien placed by the second lender. It is the borrower who would be responsible for paying off the second lender. If the borrower does not pay off the second loan, then the lender would have the rights to either charge off the account or garnish the wages of the borrower.
Take care.
Hi, Sara -
Thank you for responding. So if the first mortgage holder approves the short sale, the HELOC bank (second mortgage) is left out in the cold, more or less. Then their UCC lien is dissolved? Who takes care of that? And the buyer has no worry about a cloud on the property?
Thank you for responding. So if the first mortgage holder approves the short sale, the HELOC bank (second mortgage) is left out in the cold, more or less. Then their UCC lien is dissolved? Who takes care of that? And the buyer has no worry about a cloud on the property?
Hi Paula,
The second lender has the rights to recover his dues. He will garnish your wages or place a lien on your other properties if you do not pay off his dues.
The second lender has the rights to recover his dues. He will garnish your wages or place a lien on your other properties if you do not pay off his dues.
seller is not working. Would that garnish come later or is there a period that has to pass by until they give up and don't collect?
Welcome roody,
Your query is not clear to me. Can you please explain your query in details so that it becomes easier for the members to offer their suggestions?
Your query is not clear to me. Can you please explain your query in details so that it becomes easier for the members to offer their suggestions?