I get this question asked of me all them time when meeting with clients in Menifee, CA. The simple answer is yes! You can definitely
and successfully sell on a short sale with liens. There are many types of liens.
The most common lien is a 2nd lienholder. This means you have the primary mortgage and a 2nd mortgage. In this situation it is common that the first lienholder pays off the 2nd lienholder during the short sale. The payoffs I have seen are anywhere from $4K and $8K. The good news is there is little incentive for the 2nd lienholder not to accept the payoff.
There are other liens that can or cannot be attached to the property but still need to be cleared up prior to closing such as mechanic liens, judgements, utilitlity bills, alimony, etc. Liens can be temporarly removed from the property in order to short sale but get an experienced agent that knows how to execute this process. I once had a listing where there were code violations on the property by the city in excess of $25,000. We successfully negotiated the liens down with the city and got the bank to pay the balance. This is an unusual circumstance but can and does happen.
The most difficult lien to get cleared up is outstanding HOA fees. I always suggest to my clients to remain current with their HOA's. It is a small price to pay to avoid foreclosure. There may be other workout solutions but staying current gives my clients peace of mind that their short sale will go through.
Once the liens have been negotiated any outstanding payoffs will be noted in the banks approval letter. The pay off is also called out on an itemized statement at closing. This itemized statement is a line by line item of costs to the lender associated with the sale of the property and referred to as a HUD-1 Statement.
If you are thinking about a short sale in Menifee or Temecula Valley and know you have outstanding liens on the property, I have experience in this area and can help. Call me at 951-315-3201 for a consultation on your situation.
Comments(0)