I thought my readers may find it interesting to hear a little bit about some of the "behind-the-scenes" information regarding negotiating a short sale...Every day we are dealing with lenders and are involved with negotiations on short sales. A recent hurdle has been the negotiations with 2nd lien holders (2nd mortgages/home equity liens). We thought that the following may be of interest to a lot of folks currently contemplating how or even IF they should do a short sale....
These days many 2nd mortgage companies are now asking for 10% of their principal balance in order to release their lien. Prior to these recent changes, ALL 1st mortgage holders allowed a maximum of $1,000 to 2nd mortgages, period. Once 2nd mortgage holders started demanding 10%, it made obtaining approvals from both mortgages quite challenging. After all, 10% is quite a large number! And most 1st mortgages will only allow a maximum of $1,000 right?
Well luckily for our sellers, SOME 1st mortgage holders have paid attention to the changing trends and have started to change their policies to match. Now, more and more 1st mortgage holders are allowing a payoff of up to 10% to 2nd mortgages to avoid any complications. And for us short sale specialists, this is helpful to successfully navigating a short sale for our sellers! One of the lenders that have started to be more open to this policy change is ASC.
Keep in mind, not all 1st mortgage holders are doing this, and it is on a case-by-case basis, but, they are at least open to it and some will approve 10% to be paid to 2nd mortgage holders.
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