Help! Negotiating Second Liens for Short Sale

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Real Estate Agent with Trin Hong Real Estate Inc.

I am looking for some help negotiating with second lien holders. I have found that more and more banks are requiring us as agents to negotiate the second lien. I've already had one denied for the $3000 the first allowed for it and I'm working on about 6 others. Any information, tips and knowledge would be most helpful!

 

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Tags:
short sale
short pay
negotiating
second
lien

Comments 18 New Comment

Anonymous
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Rainer
10,058
Jennifer Horton
Trin Hong Real Estate Inc.

Eddie & Basilio,

I've done some 2nds where the first pays what they are going to allow and the buyer pays up to $20k cash to the 2nd. It is important to structure the HUD properly so that the first doesn't come back and say they deserve that money! Because they will! It can work!

Jennifer Horton

Short Sale Coordinator/Realtor

February 02, 2009 12:37 PM
Anonymous #16
Anonymous
Justin

Is it possible to write an offer that gets close to a BPO get the 1st approval and then add an addendum with the Buyer paying $50,000 to "Lien Holders" and give it to the 2nd?

August 04, 2009 01:22 PM
Rainmaker
233,668
John M. Scott
Broker / Owner San Francisco Real Estate
BRE # 01442690, Scott Keys Properties

So Jennifer - How do you structure the HUD1 for the buyer to pay off the 2nd above what the 1st allows w/o the 1st realizing it??? This would be much better for the buyer to have their money go thru escrow than the very risky payment directly to the 2nd.

September 19, 2009 06:37 PM
Anonymous #18
Anonymous
DaveUK

 

John/Jennifer - I am also very interested in this approach as I am dealing with a 1st lien who will not allow a 2nd lienholder pay off of more than $x to appear on the HUD1 and the 2nd lien wants far more. My buyer is willing to pay the 2nd the difference, but we need this all to appear on the HUD1 somehow.

It has been suggested that the way to do this is to put the additional 2nd lienholder pay off as a buyers expense in the HUD1 and then mark it (p.o.c.) to indicate that it was paid outside of closing. I still don't know if this will satisfy the 1st lienholder.

Any thoughts on this? Are there any alternative ways to handle this situation?

September 22, 2009 12:07 PM
Rainmaker
894,755
Tony Marriott
Associate Broker, REALTOR
Haven Express @ Keller Williams Arizona Realty

Junior Liens when handled correctly do not need to tank a short sale transaction.  Persistence is key.

December 22, 2010 10:50 AM
Anonymous
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Rainer
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Jennifer Horton

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