Can anyone shed some light on why the investor on 2nd lien would rather let a short sale foreclose than take a promissory note for $20k (loan = 60k)?

Asked by Joand, 94577 Fri Oct 29, 2010

There is no cash to offer in this deal and Wells Fargo refuses to present the offer of a promissory note to the investor. Wells says that the ONLY way to release the lien is to give the investor $20,000 cash. Wells Fargo won't even convey the message to the investor that we will sign a promissory note. The house will foreclose as a result. Does anyone have a theory or can refer me to a super sharp attorney or consultant to help get past this wall? There is already an inference from the Wells negotiator that the investor believes they have legal recourse with Wells Fargo's legal team...whatever that means.

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Bob Georgiou, Agent, Danville, CA
Fri Oct 29, 2010
BEST ANSWER
Joand,

Call an attorney is the proper thing to do. Genereally speaking if your loan is insured there will be 100% recovery and there is no motivation for any investor to negotiate plus they have full recourse rights against you as backup if there are "issues". I may additionally advise that the attroney you seek out have a bankrupcy division (Mostly for negotiation purposes but its also good insurance so that you are covered both ways).

This is really what I want to discuss with the world if anyone is paying attention. This, right here, is what is wrong with the real estate insdustry right now. TARP/CDO-CMO Mess and insolvent banks that are propped up by the federal government in the name of preventing greater economic collapse is preventing good honest people from salvaging their homes and finances. It is creating injustices so hedge funds and a banks managing a corrupt system can salvage itself.

I am going to make a political statement here but anyone who goes and votes for an incumbent politician that has been in office for more than 2 years (republicans included) is just perpetuating the problem. the solution is turn these banks over to receivers (bankruptcy - so that all contract rights are settled for pennies on the dollar) starting with B of A or Citigroup and renegotiate every loan originated since 1990.

This is truly an unfortunate situation, good luck.
Web Reference:  http://bob2sell.com
0 votes
Steven Ornel…, Agent, Fremont, CA
Fri Oct 29, 2010
Hi Joand, the CAR Legal Hotline is ONLY for Agents and Brokers that belong to the CA Association of Realtors, they DO NOT answer questions from the general public.

I would suggest that you first speak with a Tax Advisor about your plans and then a Real Estate Lawyer to help make them happen.

On 4/20/10 I attended a presentation on the legal ramifications of short sales/foreclosures. The two speakers are listed below:
Bryce Despain, Despain Tax Services, http://www.despaintax.com
Robert Jacobs, Attorney at Law, http://www.rbjlaw.com

Best, Steve
1 vote
Perry Vittor…, Agent, San Leandro CA 94577, CA
Sun Jan 30, 2011
Unfortunately this is a common tale. We've dealt with the situation a number of times and the only time we've gotten any results is after an extensive letter writing campaign to all parties involved including the media. After countless letters we finally stumbled upon someone with the authority and intelligence to make an informed decision. In these cases sometimes the squeaky wheel gets the grease.
0 votes
Antonio Car…, Agent, San Leandro, CA
Fri Oct 29, 2010
Touchy subject here, but what jumps at me when I read your question is: Probably a good tax write off for the investor. Other than that, I doubt that anyone on this forum will risk giving you legal advise. You will be better off consulting with a tax attorney. Good Luck
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Fri Oct 29, 2010
Hello Joand,

You might want to try calling the Department of Real Estate legal hotline and see if they can assist you....
its free ...if they can't help, they may be able to refer you to someone who can. The number is 213-739-8282.

I'm sorry you are in such a sticky situation..good luck with everything.

Please feel free to call or email me if I can be of further assistance.

Thank you
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