Consult an attorney, Countrywide is sold to Bankof America and they should be lienient under govt. deal. Try to work out with buyer out side the escrow to makeup the the demand.
HOW MUCH IS IT?
They don't want the notes or you to assist because technically you are cash poor and that is why you are doing the short. Very common that lenders will require excess cash to go to them...not the buyer, realtor, or anyone else.
The buyer theoretically should be getting a good deal without the 3%...and possibly I would be negotiating more with them to take it or lose it...if there is enough equity, they won't want to lose it. However, I would be negotiating more on Countrywide to pay the extra 3%. They stand to lose a lot more than 3% if they kill the deal and have to carry the house through foreclosure. Depends a lot on their sense of urgency.
Countrywide is only approving seller concessions of 3% and does not allow me the seller to assist in closing costs in cash or promissory note, otherwise any money I bring in at closing would have to go to Countrywide. The buyers are insisting on getting 6% concession otherwise they will walk away. I am trying to find a way to get that missing 3% if we can not convince the buyer to lower their demands. We initially thought about reducing my realtor's commission and transfer it to closing costs as realtor's concession. Then I would pay my agent outside but my agent says that is against the law and her realtor will not allow it. So we are stuggling to find ways to get that missing 3%. Some ideas we thought of are:
- ask the buyers to increase the loan amount and roll the extra 3% in there. They don't want to do it.
- ask both realtors to reduce their commissions but the buyers' agent does not want to give up more than $1000. That's too little.
I'm willing to do anything to get this done but I am tied by Countrywide's requirements. If anyone can think of a solution, please let me know.
Thank you for your feedback.
Bill Wootan - Leader of Team One
Century 21 H T Brown Real Estate, Inc.
Let me preface this by saying. Get an attorney. I am not an attorney and this is not, in any way, to be construed as legal advice.
Having dealt with short-sales it is my understanding that the 2nd lein holder has no say in the transaction. They cannot stop the sale if the 1st position is satisfied. As the 2nd lein holder they cannot start the foreclosure process if the 1st lein holder is current. They must show the 2nd lein as satisfied so the Buyer's can get a clear title report. If there is any money left over after the 1st lein is paid then the 2nd lein holder get the rest up to the 2nd lein amount. There are also possible tax ramifications in a short sale or foreclosure.
I found some information at http://www.shortsalecenter.com. I do not know who they are and I do not endorse them. You may want to call them and find out your options.
Conceptually, Countrywide is right in that the second mortgage holder generally is willing to accept very little. It's either, in this case, the $3,000, or nothing. As one real estate guru likes to say, "It's not much, but it's better than a poke in the eye with a sharp stick." And my guess (heck, it's more than a guess) is that Countrywide knows what it's talking about with short sales.
There'd be no harm in consulting a bankruptcy attorney, but (again, I'm not a lawyer, so this isn't legal advice) bankruptcy will only put the foreclosure on hold. There will be a resulting bankruptcy plan that you'll have to adhere to, and that'll involve making your mortgage payments. The foreclosure can be delayed so long as you're making those payments, but if you slip up, you're back to square one. So, think very long and hard before going the bankruptcy route.
Hope that helps.
Your best bet, in my humble opinion, is to consult an Attorney. If you cannot afford one you may be able to qualify for free legal advice from a pro bono offering. Here is a couple links that may help:
http://www.freeadvice.com - or.... http://forum.freeadvice.com may be good.
Personally, I would rely on Countrywide's advice and contact your second lien holder. I have two loans with Countrywide and know a couple of their local agents personally. The second lien holder has the opportunity to also buy out your first lien if they so choose, but it seems unlikely that they would accept only $3,000 for their $99,000 loan. Have you thought about Bankruptcy protection? You will find that most Attorneys who do Bankruptcy will give you some free advice as an initial consultation.
Have you thought about renting out your home? In most cases the rent would not cover the loan payments but you never know. It works for some people.
Best of luck... you are not alone. A lot of people are facing the same dilemma.