How to avoid getting into a jam with second mortgage negotiations

Real Estate Agent

Question from an Agent: I think I put myself in a pickle would like to know how to avoid it next time. First lien holder gave me a price and a net they would allow. OK, I got the price and the first got over the their minimum net they said they had to have. So with that the HUD I offered the 2nd what ended up being 12% of their loan. (76K loan we offered 9600.00) They want 15K are saying it is final and I don't know if the first will give it up. It is HSBC and I was operating on what I had heard and that was that they would take 10%...clearly I have bad information.

Any suggestions on this one? What would have been a better approach...offer to the 2nd on a different HUD a smaller amount to start? I used the same HUD to present to both, getting the firsts approval first. Bonnie Adamson.

My answer: Ouch! Here is what I would do to avoid this in the future. Put together two separate HUDs, one for each MTG company. The first would see a HUD with 20k going to the 2nd. Meanwhile the 2nd would get a HUD with 3k and more money going to the first.

Robert Ringer, in his book Winning Thru Intimidation, talks about this problem. He was working as a mortgage broker on a hard money loan for a development. He had to juggle the lender bringing money to the table and what the developer would net at closing. Plus, he had to make some money for himself in the middle. What did he do?

He started out telling the lender he needed to grant a big loan and told the borrower he was getting less money. He juggled those two and ended up making some money in the middle.

Now, what can you do now to close this short sale? This 2nd mortgage negotiator is being a little unreasonable. Escalate the file, show them the MLS history, and remind them that they get zero in a foreclosure. Show them the docket status for the foreclosure case. If the house is close to foreclosure, you gain more negotiating power. Another thing to do is get both of the negotiators on the phone. Have them hash it out between each other. That worked for us on a deal before and it might work for you too.

Are you looking for a marketing system to list more short sales? We have developed a system to farm and convert the Pre-Foreclosure Leads and the Expired Short Sales. It enables us to list a consistent number of short sales each month. Now we are offering it to other agents.

Get more info at: .

If you're running into problems with short sale files, then you probably need to look into the How to Escalate a File Course. Get more info at .

You can get a copy of all the fax numbers for congress and a fax template to send to them here: .

Got questions about short sales? Just ask.

Ben Curry & Chris Curry - Keller Williams Real Estate, Gainesville Florida.

We specialize in short sales in Gainesville Florida. Gainesville Florida short sale, Gainesville fl short sale, Gainesville Florida short sales, Gainesville short sale

Comments (1)

J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY

Two HUD-1s? Are you sure about that? 

May 13, 2010 06:39 AM