I have had many conversations with second lien holders this past year and one of the statements that is common within my dialogue with them is that they literally say they are sick and tired of all these "short sale" gurus telling everyone that the second lien holder will, in fact, take $1,000. They are getting extremely frustrated with these requests. In most cases, the actual current market value of the property is going to be something higher than what is owed to the first lien holder. They won't do a short sale if this is the case. Sure, there are situations where the property values have declined so drastically that the first is also required to take a hit. In that case, sure, the second has no choice other than to take what the first is offering in order to release the lien. Per a discussion with a loss mitigation rep at WAMU, it is actually Washington Mutual's policy to offer $1,000 to the second if they are taking a hit as a result of a short sale. Is the second lien holder going to be happy? Absolutely not. Sometimes, the second will play hardball all the way until the last second and, many times, it can be too late. Everyone loses! Our company, America's Home Rescue, has appointments with the loss mitigation departments of certain lending institutions to discuss standardizing these processes for conventional loans with second liens. In our program, which we're bringing to many locations around the nation this year, we're teaching agents to make every attempt to properly list the house on the front end to where theywill procure offers that typically net the second lien holder much more than a $1,000. We've told the second lien holders (i.e. Litton, GMAC, Ocwen) that we're teaching agents to get them more than $1,000 and they're loving us for it. Now, we must say that there are a lot of cases to which the loan amount is so grossly over value that the first is forced to take a hit and the second will get next to nothing, regardless of what is owed to them. There's no other way except when the second decides to buy the first and usually they're basing their decision on a value that isn't realistic. Remember, you're negotiating with a system, not just loss mitigation reps hired with little to no training. Have you pulled up the job descriptions lately for loss mitigation reps on Monster.com? Banks are hurting so much that they're accepting "high-school" as acceptable experience. Work with the systems, not against them.
Michael Spickes
America's Home Rescue
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