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Need help!!!!!

By
Real Estate Agent with AVALAR Pro Realty

Got a homeowner that has made late payments and we are looking at the possibility of a short sale. However, they have a second mortgage is with another lender. What do I need to do. I have little to no experience with the whole second mortgage thing.

Comments (6)

Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

Man if I could answers this in 20 words or less I would I will break it down for you this way

1. Get the seller to get a payoff quote for the 1st and 2nd

2. Run a detailed CMA focus on SOLD

3. look at the lowest best Sold comp

4. Price the home at that price or less by 10%

hmmm notice we have not talked about the 2nd lender yet ... why because with out an offer no one will get anything.

Here in GA when a property goes to foreclosure the 2nd gets nothing .. so when I do a short sale with a 1st and 2nd I start from that point. The 1st gets all the proceed and agrees to give the 2nd something.. generally 1k -5k depending on the 1st lenders net.

Now if you pay the 1st 100% after all fees then whats left goes to the 2nd

SO GET IT LISTED PRICED RIGHT THEN CALL ME FOR PART 2

May 21, 2008 06:47 AM
Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

Hi Michelle,

If I were you, I would stay away from Short Sales--the headaces and stress are not worth it.  I had 2 people who wanted to do a short sale and after I did my research on short sales--this site was very helpfull, I decide--that it's not for me. 

If you don't get the second to agree to get "nothing"  they can and I've been told will put a lien on the borrower's name.  So if they ever want to purchase a home--they will have to pay that judgement!  I am no expert on this and you might want to look into this a little bit more.

There are companies out there that will handle short sales and might get a referral fee (not sure about the referral fee) 

Take care and good luck!

May 21, 2008 07:01 AM
Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

If you don't get the second to agree to get "nothing"  they can and I've been told will put a lien on the borrower's name.  So if they ever want to purchase a home--they will have to pay that judgment!  I am no expert on this and you might want to look into this a little bit more

The above is not 100% correct. .. To get a lien they have to get a judgment and most lenders will agree to the payoff because if the property goes to foreclosure they get nothing at the court house and then they have to start the long expensive legal process of seeking a judgment.

May 21, 2008 07:30 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

I think the short answer is to refer it to someone who has experience in this area and take a referral fee. Take a look at Article 11 of the NAR Code of Ethics. I think it is better to be safe than sorry.

Good question and good Post!

May 21, 2008 09:05 AM
Carol Culkin
Diamond Partners Inc - Overland Park, KS
Overland Park Residential Real Estate

Yup, I agree with Michael - I would refer it!

May 22, 2008 02:19 AM
Tracy Miller
Canton, MS
S. S. Specialist

I'm not sure how much the second lien amounts to.  You didn't mention it in your blog, but I've negotiated short sales before where there were second lien holders involved.  One particular instance, there was a 2nd lien amounting to little over $30,000, and I got the 2nd to accept $2500 and trust me it wasn't because of my strong negotiation skills.  Instead, the 2nd lender knew that if the 1st foreclosed on the property he would wipe out their lien and they would get NADA (nothing).  So don't be scared to get involved in short sales where there is a 2nd or even 3rd lien involved.  You have more weight in your corner than you think.

Oct 25, 2008 02:56 PM