Brick Wall On a Fifth Third Short Sale, Need Help!

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827
https://activerain.com/droplet/f6W

I have not run into such a brick wall in the hundreds of liens I have negotiated.

5th 3rd prefers ZERO dollars over $4,500 in a short sale now. Any suggestions?

I am helping my client with a short sale on an investment property. Sales price is $175,000. The first mortgage, Citi, is taking a short sale and allocating $4,500 towards the second mortgage, which is 5th 3rd.

5th 3rd wants the entire remaining balance of $40,000 to be repaid by the seller. 5th 3rd wants the seller’s current 2nd mortgage on the investment property to be transferred as a third mortgage on the seller’s personal residence. The seller may have maximum $5,000 to $10,000 equity in their personal residence, but not really if you factor in selling costs and closing costs.

Fifth Third Wants To Take Down His Personal Residence, Too.

5th 3rd demands, per some “policy”, to have the seller encumber his personal residence up to 140% of its value.

5th 3rd also disregards the seller’s financial statement. The financial statement shows about $2,000 monthly negative including the loans that are included in the short sale. After the short sale, the seller will be barely making ends meet.

From Where Are They Getting His Imaginary Income?

5th 3rd claims that according to his credit report he has $2,000 of discretionary income, even though the CREDIT REPORT DOES NOT REFLECT most of his expenses such as groceries, baby expenses (two babies), utilities and most of the expenses needed to run a household. 5th 3rd is plucking numbers out of air and is unwilling to explain their math.

Forcing a Hard Working American Into Bankruptcy

The sellers refuse to jeopardize their personal residence and the roof over their babies’ head and are ready to pull the trigger on a chapter 7 bankruptcy to shake loose of the problem. They have spoken to a BK attorney who confirmed their chapter 7 eligibility. The BK attorney has sent a letter to 5th 3rd clarifying the situation.

5th 3rd also states they would rather get ZERO dollars in a foreclosure and bankruptcy rather than $4,500 now! Does 5th 3rd get reimbursed more by TARP or other source if they get ZERO from the seller?

We have appealed and escalated to a manager, but 5th 3rd’s answer always comes back the same: FIRM DENIAL.

We now want to escalate as high as we can. Does anyone in Activerain have any experience, suggestions or contact info within 5th 3rd to appeal a such a decision?

Any help would be greatly appreciated. I have negotiated hundreds of liens and have not encountered such a demand.

We are trying to help a hard working American family AND Fifth Third Bank.

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

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Tags:
bankruptcy
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foreclosure
fifth third bank
short sale
denial
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tarp
deficiency balance
5th 3rd
substitution of collateral

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Rainer
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Michael Smith
Michael Smith (Homexpo Realty) - Orlando, FL

It's likely that the bank doesn't want the write off on their books. If the loan wasn't used to purchase the property this is a factor for them also. If your client wants to avoid bankruptcy you might try negotiating a 3rd mortgage with no interest and no payments.

Jul 18, 2011 03:08 AM #1
Rainmaker
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C. Lloyd McKenzie
Albuquerque, NM
Living Albuquerque

Unfortunately, I do think your client may be running out of options.  Not sure about your state law, but there is always the Deficiency Judgment that you have to worry about in the end.  Since it's an investment property. the banks will not extend any sympathy here  

Aug 16, 2011 04:49 PM #2
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Rainmaker
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