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You may want to shift the attention to the 2nds motivation. Remember that if there is a foreclosure it is possible that the 2nd could receive nothing. In actuality, the 2nd wants more of the proceeds than the1st is willing to give. Try to shift the focus to negotiation between the two lenders.
Most importantly, you should to determine whether or not the total cost constitutes, at minimum, fair value for the home and then negotiate accordingly.
I had a case just like this. I escalated file direct to Freddie mac and they would not budge (the 2nd) we lost the deal. Another, i filed a complaint w/the treasury and we CLOSED the deal without a contribution and full release... there are governement agencies you can go to for assistance - but usually HAS to come from the listing agent. That 3rd party can bring some accountability. Treasury, HAMP Escalations, FDIC and Office of the Comptroller as well as FNMA help desk and Freddie Escalations are the best places to start (which is what the listing agent would have to do to try to fight these sometimes unfair practices).
When I have been the listing agent, I have already discussed the possibility of the 2nd lien holder not accepting the first lien holders offer. The seller's are prepared to contact the 2nd lien holder directly and determine if they can negotiate a smaller settlement. Some Seller's sign a no interest note for the addtiional sum needed to prevent the home from going into foreclosure. I also advise the Seller to contact a CPA and Attorney to seek advise before they sign any note to release the lien.
Perhaps you can suggest the Seller contact the 2nd lien holder directly to determine if they can find another solution to the problem.
The largest Buyer contribution I have been involved with was $26,00 paid to a 2nd lien holder to get the lien released. Buyer & Seller split $5,200 to make the closing happen. Seller apparently signed a note for the 2nd for their portion of the $2,600
Jack Gillis, M.B.A., J.D.
Jack Gillis Realty Advisors
Nathan Grace Real Estate, Broker
5619 Dyer Street | Suite 100
Dallas, TX 75206
There are many variables and we, agents are always on the lookout for any possible surprises like lower appraisal, differences between what the 1st will pay and the bottom payoff amount which leaves still gap that buyers, sellers, and agents can't easily close.
Nextage Capital Advisors
1521 Wilshire Blvd
Los Angeles, CA 90017
It happens. Not long ago, I had a similar experience. The 1st conditioned the sales contract to $X amount to the 2nd which the 2nd disagreed. And besides this, the 1st one did not allow any other proceeds to be pay off outside of this sale's contract directly or indirectly even if the Buyer wanted to pay some of the 2nd.
You should not pay anything else that you're not suppose to pay, like the Seller's 2nd. The Seller's agent or listing agent must negotiate this with both 1st and 2nd. And eventually, either the 1st will cease to pay off a little more to the 2nd or the 2nd will take whatever. In general, neither the 1st or 2nd are eager to foreclose. If the 1st forecloses, 2nd would be wipe out; 2nd would get -0-, â€œnada.â€ And if the 2nd forecloses, 2nd would have to reinstate the 1st and keep up with payments and negative equity, which for sure the 2nd would not do.
Don't panic; just say no and tell your agent to pressure by negotiating; this is a learning process.
(323) 285-8864 mess
Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Dre License #01712757
We have heard that approx 75% of Shortsales fail; I am sure that a SECOND accounts for the vast majority of those failures.
You have drawn your line in the sand, you know what you are willing to pay, and an extra $7500-$15000 is not acceptable!
I should add that you don't KNOW that the $18000 figure REALLY IS acceptable to the Second Lienholder: They may come back with another $5000 - $10000! (They can if nothing is in writing).
It is time to move on: Go look for another House-of-your Dreams; its out there.
Good luck and may God bless
Depending on how strong a negotiator the listing agent is, they can get that offer from the second negotiated down. Second TD's may ASK for 20%, but they are TAKING $3-6000 on a regular basis. I just negotiated TWO different short sales where a $90,000 and a $100,000 second took $3000 and $6000 respectively. That is the new norm.
If I were your agent, I'd tell you not to pay anything, and send the listing agent back to the bargaining table. There are plenty of fish in the sea. You DO NOT HAVE TO CONTRIBUTE, nor should you.
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
Accredited Buyer Representative|Certified Distressed Property Expert |Pre-Foreclosure Specialist Certified
I want you to know that I appreciate any referrals from friends and associates who may be in the market to buy or sell real estate. You can count on me giving them the same high-quality service I provide to all of my clients.
As a SFR (Short Sale & Foreclosure Resource) designated agent as well as a CDPE Certified Distressed Property Expert. I agree with my colleagues that have answered your question. What is NOT acceptable and is fraud; if the listing agent is asking your agent to tell you this money is to be paid "outside of escrow" meaning your lender does not know about this payment the listing agent is acting you to commit fraud.
Best of Success to you,
REMAX Westside Properties
CRS, GRI designations
As others note, 10%--or in this case $9,000--is closer to what's commonly done. And the second will be wiped out if it sticks to its guns, demanding $18,000, and you (and others) aren't willing to come up with it. The question the second has to deal with is taking a sure $9,000 (or some lesser amount even), or holding out and ending up with nothing.
So if you don't want to pay $18,000, offer a lesser amount. You could lose the deal if the second says "no." It's a gamble.
Hope that helps.
The main thing you have to keep in mind is that YOU are not dealing with the bank. The seller is dealing with the bank in a debt settlement capacity. In essence, what the bank has done here is come back to the seller and said "we will not settle your account with us for less than $18,000". They don't care who pays it, whether it's you or the seller. Ultimately, it's the seller's loan. The debt is his responsibility. It has nothing to do with you.
Will you lose the property if you don't pay? Maybe. If the seller doesn't step in and pay, and the 2nd lender doesn't back down on their demand, then you have no deal. It depends on what it's worth to you. Unless you're getting a really screaming deal as it is, I probably wouldn't advise you to come in with that $18k.