PMI COMPANY KILLING A SHORT SALE? STOP THEM COLD!
I have gotten more calls from around the country about this horrible situation plaguing many short sales....
All the pieces of the puzzle finally come together: The seller is agreeable; the buyer has stuck it out and is still hanging in; the title work doesn't come up with any suprises; the bank FINALLY agrees to the short....ya think you are home free...
Then you get a letter from the PMI company that they will not approve the sale unless the seller shoulders part of the loss. Either in a lump sum at closing or double the lump sum as an unsecured note.
Everyone freaks out! All is lost! As the agent for the seller, we are practically in tears and thinking about a career working midnights at WalMart...
All may not be lost, my friends. The best kept secret in lending is that any mortgage written prior to 2007 (some even prior to 2009) have a sentence in the Mortgage Document that says that the mortgagee (Owner) is not a party to the PMI company. That the relationship with the PMI Company is between the bank and the company of their choice.
I have had incredible success copying this page, highlighting that part of the mortgage and sending it on to the PMI Company. The lender took out the insurance, paid the premiums and worked the deal with the PMI company, not the seller! If the owner is not a party to the PMI company, they cannot owe them money!
I LOVE THAT!
If the mortgage does not contain that phrase, there are still a lot of things that can tip the scales in favor of the owner not having to sign a note for the PMI Company, kill the deal or bring a chunk of change to closing....
but that is a story for another day....
Man I love short sales! This is the stuff that just gives me the warm fuzzies!
Thanks for letting me share.
Happy Real Estate-ing
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