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De, Home Seller in Reynoldsburg, OH

My husband and I have been trying to short sale our home. 2nd bank said they will take 5,000 of a 50,000 loan

Asked by De, Reynoldsburg, OH Mon Mar 3, 2008

release lien and forgive debt. The first bank weve had a lot of run around no word on what they will accept ,had a buyer lost them due to the long process from the first mortgage. Now I'm thinking I maybe want to save my home and stay here. Is there a way I can pay the second the 5,000 to release the lien and for give the debt and work through the loss mitigation on the first mortgage to get it current?

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Dear Home Owner, I have to completely disagree with Diane. I work as a Short Sales Analyst at a major bank in central Ohio. I can tell you that you should be working with both of your lienholders. Communication is key especially during a short sale. I have completed many short sales where the seller relied soley upon the agent and would not talk to the bank. After the short sale was complete the bank would end up with a call from the upset seller because the agent did not provide them with adequate information about the process or deficiency balance. The lender on your 2nd may not agree to release/settle for $5k for you to stay in the home but I guarantee they may very well be more likely to negotiate a settlement at a higher amount. Typically, the negotiations begin at 50% of the unpaid principal balance. Generally, your lender may see that they will recoupe more on the dollar thru a settlement than on the short sale. When a lender has a 2nd lien position they are more likely to net only $3k or 10% of the unpaid principal balance (whichever is less) + any add'l monies that may be negotiated with the seller. In the meantime I would work with your 1st lender to see if they will modify your payments to make it affordable on a monthly basis so you can stay in the home (if a hardship is applicable). I hope this helps. Also, per the comment from John.. do not pay for a 3rd party negotiator. Banks are already taking a loss from a short sale. Believe me most banks will not agree to pay their fee because those funds could be used towards the unpaid balance. (esp in they are in a jr. lien position). Work with your bank...its FREE! May I ask who your 2nd lender is???
0 votes Thank Flag Link Fri Jan 28, 2011
De,
It is not likely that your second bank will forgive the debt to let you stay. I can tell you, though, that you shouldn't be talking to the second mortgage holder. Just the first. They will negotiate with the 2nd lienholder for you.
Should you decide to stay, let your banks know now and start working out a way you can afford to do so. The banks really do not want the houses back. Depending on the lender, some make it easier than others.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Tue Mar 4, 2008
In short to your question, I am sure there is no way to do what you are asking. Basically, you are asking the bank to give you $45K and let you keep the home and I have never seen anything like that. Now, an investor can purchase the home and rent it back to you after the closing if you so choose to stay there, he may even be willing to sell it to you on a lease option or land contract if you decide to gop that route - I have seen that happen before.

Do you have a professional helping you negotiate with the bank at all? How much is the first mortgage and how much are you selling them short? Who are the two banks invovlved?

I would love to help you, but just need more information. Please visit our short sale website and I am sure we can help.
0 votes Thank Flag Link Tue Mar 4, 2008
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