Your realtor has a better chance of negotiating with the 2nd to be satisfied with the $8,500. Where is the incentive for the seller to contribute - even if he could - and walk with only $500?
Besides, nobody wants to be sued for convincing a seller to pay and later have a lawsuit claiming the seller was forced to pay for the deficiency. The new law is meant to prevent this situation.
If you really want the property the agents or buyer could pay toward the 2nd; just not the seller.
I agree with Harold - look at some other properties.
Best wishes with your negotiations.
Senior Loan Officer
Land Home Financial
7670 Opportunity Road, Suite 165, San Diego, CA 92111
Office: 858-634-1208 Cell: 858-344-5998
I am not in the transaction so it would be a best guess....
Here is how it works.
on a short sale, the banks in this case B of A allows a certain amount for the second lien.
Thats it. that is all they get from the deal.
The Second wants more money. The seller cannot use funds from the sale to pay the second at all.
The listing agent or negotiator is to try his best to make it work.
Odds are it may not.
You might consider looking at more homes.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate Broker License # 01312992
Do you know who the second is with? How much is the second for? $15K seems quite a bit unless there is a significant second lien. Possibly greater than $100k? Did the seller do a HAFA short sale? If they did a HAFA, then the second, assuming if they are participants under the HAFA program, will have to agree to take the $8500 to settle. The second cannot get any additional funds from anyone due to this cap. There may be situations where the second does not participate in which case the first will have to be processed under BofA's cooperative short sale program. If that is possible, then the seller, if they are getting relocation assistance and/or other incentive moneys, may be able to contribute some of their funds towards the second. I have seen this happen on judgment liens that the lender did not want to pay. However, the lender cannot ask the seller to contribute any money because of CA law because it can be construed as collecting on the deficiency balance.Typically, there is no issue with the buyer and/or agents contributing any additional funds provided however there is full disclosure on the HUD to the lienholders of such.
Maria Rosino-Miracco, CEO/Attorney/Realtor
Premia Realty Group, Inc.
Your RealtorÂ® is correct; however, it's not the full story as in many cases when you encounter legal situations.
According to CAR Legal Staff during a webinar that occurred on 10/3/2011:
The LENDER can ask the BUYER (or any other party except Seller) to pay towards the deficiency in order for lender to approve the sale. Additionally, the SELLER can volunteer to provide additional funds to facilitate an approval; HOWEVER, it is best for the Listing Agent to set this up when the Short Sale package is submitted to lower the Lender's/Agent's legal risk.
Ask your RealtorÂ® to call CAR Legal and pose the situation for feedback. You can also reference this blog post which has the text of the law.
"CA Senate Bill 458 Now Prohibits 1st/2nd+ Deficiency Judgments*"
Good luck with the SS.
If this IS a HAFA short sale then the person doing the negotiations should alert the government oversight people of the situation. In fact, they may only need to threaten to contact the government oversight entity to get the second lien holder to back off. Look, these banks took billions in Tarp bailout money. They do not get to now reap a windfall profit off the banks of strapped homeowners.
Glen S. Etherington