More Lenders Allowing 2nd Mortgage Discounts
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 us, 1st mortgages have paid attention to the changing trends and have changed their policies to match. Now, more and more 1st mortgage holders are allowing a payoff of 10% to 2nd mortgages to avoid any complications. And for us short sale specialists, this is perfect! 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. Try to determine your particular investor’s guidelines. Some 1st mortgages will only require that their net amount is met, and they won’t have any restrictions on how it happens. But in all cases, it is worth pursuing getting them to pay 10% to the 2nd mortgage, because you just might get it!
Strategy:
When it comes to actually putting this knowledge in practice, the best way to approach it is this: initially offer $1,500 to the 2nd mortgage, that way you can negotiate up with them. On the HUD that you send to the 1st mortgage, include a payoff amount of 10% of the 2nd mortgage’s principal. That way, you can initially explain the situation and try to get the full 10%. Otherwise, you can still hopefully get the 1st mortgage to pay above the $1,500 you initially offer the 2nd, so both mortgages feel like they’ve won! For more articles and videos with real-time updates on changes in the pre-foreclosure industry visit www.RealEstateBusinessMentors.com and if you would like to ask me a question visit www.AskBobLachance.com.
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I live in Missouri, my brother lives in Texas. He has a house in Michigan the renter moved out. He has about 60-90 days till auction.
He owes 178000
Hes trying to sell with realtor for 189900 to cover commissions
My bro told me he knew buyers who would purchase for 160000
Hes interested in a ss
His realtor is not familiar with ss
Im thinking I join :Manage My Short Sale .com.
I have my brother up load his info
I have the realtor upload comps
I negotiate
Say I can negotiate 125000 and realtor has buyer for 160000. Who gets what and how