When the 2nd Lender in a short sale wants a kickback

By
Real Estate Broker/Owner with Lucrative Realty & Associates

I  am a student at  Harris Real Estate University, I got this video from one of their blog post I thought it may help anyone working on a short sale or even thinking of doing one.

This practice has been going on for years.  It's good to see the media is starting the recognize this is illegal and say something.  The second lien holders force you to go with the deal they put on the table or walk. 
When you're doing a short sale the second will try to get you to pay outside the HUD.  Any amount is illegal but no one has been challenging them on this for fear of loosing the short sale.  I don't believe in paying the 2nd anything over what the 1st agreed to on the HUD.  They get nothing if the house goes to the court steps.   
When the second lender wants a kickback tell them NO.  If you don't you may find yourself paying for that house for years to come.  The short sale is designed to get you out of the home and save your credit.  Not tack on a bill for you to pay for the 4 to 5 years.  It's a game you have to know the rules to win.

 












Posted by

Leon Duncan CDPD,LDPD,CPS

Associate Broker/Branch Owner

 

                

Comments (3)

Aaron Cullen
Brokers Inc. Residential Real estate - Folsom, CA
Folsom, El Dorado Hills & Sacramento Real Estate &

Its amazing that the media is just starting to pick up on this.  This has been going on for years....

Jan 15, 2010 12:39 PM
Mandy Buchholz
Benchmark Realty, LLC - Murfreesboro, TN

Kudos to you Leon. I have not ever had that happen and if I ever do I will find someone to report them to.

Jan 15, 2010 12:41 PM
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

If a lender asks me to have buyer or seller pay them outside of the HUD, this is my answer:

"Please send me an email detailing exactly how you wish me to handle this. I will submit it to my Arizona Association of Realtor legal counsel, Michele Lind, Esq., and have her provide me with a legal opinion.

If she informs me this is legal then I will work with my client and the buyers agent to work out the agreement."

If she informs me this is illegal, then we can proceed with everything disclosed on the HUD-1.

Jan 08, 2011 05:27 AM