Posted on: 25th Jan, 2010 07:48 am
A 1st mortgage holder has agreed to accept a shortsale offer but has only offered the 2nd lien holder(credit line) a non- negotiable token amount stating that no $ exceeding their offer would be allowed. The 2nd lien holder has offered to accept the approval as offered but will only approve the offer if they receive a greater payoff. The buyer is a cash buyer and will satisfy the first mortgage holder. We as the owner are willing to meet the 2nd lien holders request for the larger payoff amount.
Problems:
1. The terms of the approval letter from the 1st mtg holder state categorically that only the amount they have offered to the 2nd lien holder will be acceptable. Any additional funds must be paid to the 1st mtg holder.
2. The 2nd lien holder has made a fair offer to settle but does not meet the terms of the approval letter. The 1st mtg holder/investor refuse to alter their terms.
3. Also the 2nd lien holder will not accept the selling price, even though the 1st mtg holder has accepted it. They state that the sellling price does not meet their criteria of being 85% of their BPO. They would gain nothing more financially even if the selling price was considerably more.
4. The 2nd lien holder's BPO is, in my opinion much greater than the 1st mortgage holders. I have requested they get 1-2 others to compare.
Summary:
The banks will not communicate with each other.
Their terms, criterias and guidelines are very rigid.
Each bank, because of their unwillingness to be flexible, will as a result end up loosing even a greater amount of money.
Foreclosure is imminent, only being held off during these negotiatons.
Summary of positives:
1. The buyer has offered a fair price (cash) with no contingensies.
2. We, the owners are willing to pay the 2nd lien holder what they have requested, which is some cash(10%) and an unsecured promissory note.
Thoughts:
If we can make a settlement with the 2nd lien holder, they would no longer need to be involved with the short sale. We could then accept the 1st mtg holder/investors approval offer less the token offer they had made to the 2nd lien holder and move forward.
Questions:
Do you think this is a viable solution? If not, are there better options?
Please give me your suggestions as to the best way to proceed.
Thank you for your help. Jim
.
Problems:
1. The terms of the approval letter from the 1st mtg holder state categorically that only the amount they have offered to the 2nd lien holder will be acceptable. Any additional funds must be paid to the 1st mtg holder.
2. The 2nd lien holder has made a fair offer to settle but does not meet the terms of the approval letter. The 1st mtg holder/investor refuse to alter their terms.
3. Also the 2nd lien holder will not accept the selling price, even though the 1st mtg holder has accepted it. They state that the sellling price does not meet their criteria of being 85% of their BPO. They would gain nothing more financially even if the selling price was considerably more.
4. The 2nd lien holder's BPO is, in my opinion much greater than the 1st mortgage holders. I have requested they get 1-2 others to compare.
Summary:
The banks will not communicate with each other.
Their terms, criterias and guidelines are very rigid.
Each bank, because of their unwillingness to be flexible, will as a result end up loosing even a greater amount of money.
Foreclosure is imminent, only being held off during these negotiatons.
Summary of positives:
1. The buyer has offered a fair price (cash) with no contingensies.
2. We, the owners are willing to pay the 2nd lien holder what they have requested, which is some cash(10%) and an unsecured promissory note.
Thoughts:
If we can make a settlement with the 2nd lien holder, they would no longer need to be involved with the short sale. We could then accept the 1st mtg holder/investors approval offer less the token offer they had made to the 2nd lien holder and move forward.
Questions:
Do you think this is a viable solution? If not, are there better options?
Please give me your suggestions as to the best way to proceed.
Thank you for your help. Jim
.
Hi jam,
You will have to speak to your second lender regarding the settlement in order to check out whether or not they would be ready for it. If they are ready to accept the settlement, then you can go ahead with it. If they are not ready for it, then the property would go into foreclosure.
You will have to speak to your second lender regarding the settlement in order to check out whether or not they would be ready for it. If they are ready to accept the settlement, then you can go ahead with it. If they are not ready for it, then the property would go into foreclosure.