The guarantee does not apply if events occur beyond the control of New American Funding, including but not limited to; appraised value, escrow or title delays,
2nd lien holder approval, short sale approval, or lender conditions that can not be met by any party.
While I have yet to have this happen (knock on wood) I know of other Realtors who seemingly have had a situation where
a 2nd lien holder has chosen to foreclose instead of granting short sale approval.
Of course there are times that it will be impossible to make the deal work but in many cases the skill of the negotiator can find a middle ground with
the 2nd lien holder.
During the negotiation process
the 2nd lien holder is offered $ 5000 in order to approve the short sale and allow the sale to take place.
I have exactly this scenario and wondered why
the 2nd lien holder was forcing forclosure.
When I told
the 2nd lien holder that the contribution would not be on the HUD but would be disclosed in an Addendum, the negotiator's response was, «I need to check with our closing department to see if this is OK.»
The 2nd lien holder has a loss sharing arrangement with the FDIC that will allow them to collect substantially more than the amount offered by the first lien holder under the short sale scenario.
The guarantee does not apply if events occur beyond the control of New American Funding, including but not limited to; appraised value, escrow or title delays,
2nd lien holder approval, short sale approval, or lender conditions that can not be met by any party.
If the borrower defaults on the 1st loan, the lien holder of the 1st will be able to foreclose on the property and wipe out
the 2nd lien holder's interest in the property.
The 2nd lien holder will be able to foreclose on the property if they make loan payments to the 1st lien holder on behalf of the borrower in order to keep the 1st loan current.
While I have yet to have this happen (knock on wood) I know of other Realtors who seemingly have had a situation where
a 2nd lien holder has chosen to foreclose instead of granting short sale approval.
I have exactly this scenario and wondered why
the 2nd lien holder was forcing forclosure.
Of course there are times that it will be impossible to make the deal work but in many cases the skill of the negotiator can find a middle ground with
the 2nd lien holder.
The 2nd lien holder has a loss sharing arrangement with the FDIC that will allow them to collect substantially more than the amount offered by the first lien holder under the short sale scenario.
In my case, the MI company of
the 2nd lien holder want a seller contribution yet the seller is flat broke.
A common secured product in the US is
a 2nd lien holder to a home (the first being the mortgage), called a HELOC (Home Equity Line Of Credit).
A buyer comes along and makes an offer for $ 290,000 which is accepted by the seller and sent to the 1st and
2nd lien holders.
However, you are still responsible to pay those senior to you in this case the 1st and
2nd lien holders.
Not exact matches
And why buy
2nd mortgages if there is a 1st mortgage or can you negotiate with the 1st
lien holder to accept a discount?
What does the first
lien holder do when the
2nd mortgage is sold?
Especially, with
lien holders in the
2nd position.