Home Selling in 94043>Question Details

bbran26, Home Owner in Pensacola, FL

In Florida, when negotiating a short sale with two lenders, different banks, and the contract price pays off first mortgage? ????

Asked by bbran26, Pensacola, FL Thu Jun 6, 2013

But only leaves $2000 for the second..... What are my options on dealing with the second bank in order to get a short sale approval? The second bank is wanting $5000 at least and a payment arrangement agreement signed at closing to release the lien on the house. The seller is not financially able to pay the second mortgage back(not even in a payment arrangement agreement.) Any advice would be awesome!!!!

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Thats the prob with 2nd liens, they hold a lot of power, can change there minds up to closing day! first, is the seller compliant with the bank doc requirements? Too often I have seen sellers faking compliance with bank in order to stall the process and live there for free as long as they can.
0 votes Thank Flag Link Thu Jun 6, 2013
At this time the 2nd is not obligated to accept anything less than what they want. They can also reserve the right to ask for payments later or sell the note. Here is the alternative for the second. If foreclosed they get zero but still may retain the right to collect at a later date. I believe it is 20 years in Florida. You could ask the buyer to pay the difference if they really want the property. I would escalate both loans to a higher up in the authority chain and present the scenario.

Some people are thinking of declaring bankruptcy later and include unsecured notes like this one into the bankruptcy case. For the seller it is still better to sell the property as a short sale than let it go to foreclosure because of the 20 year collection possible. If there is no agreement, the sale falls apart and it will go to foreclosure at some point. I am not an attorney and this is not legal advice but stems from experience.
0 votes Thank Flag Link Thu Jun 6, 2013
bbran26, are you negotiating the short sale? Or just biting your nails? Those are extremely workable numbers. Sit tight, this one's going to end just fine.
0 votes Thank Flag Link Thu Jun 6, 2013
Is this a HAFA short sale? If so, the amount the second lien holder receives is set by law. The buyer should not be responsible to pay the second mortgage at all, under any circumstances. I would strongly suggest the seller either agree to the promissory note or have his agent/attorney have a serious chat with the second mortgage holder. I am not sure whether Florida allows the second mortgage holder to go after the owner if the home goes into foreclosure (to obtain a deficiency judgment) or not, but if not, their option is to walk away with absolutely nothing but a lot of legal bills.
0 votes Thank Flag Link Thu Jun 6, 2013
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