[quote=JC] . . . Like many heavily indebted borrowers, Mr. Trujillo has two mortgages: a first mortgage in the amount of $260,000, which is held by Freddie Mac; and a $50,000 second mortgage, handled by Specialized Loan Servicing LLC. Freddie Mac will allow no more than $3,000 in sale proceeds to go toward the second mortgage. But SLS says it will scotch any deal if it doesn’t get at least $7,000. . . [/quote]
Yes, .06 on the dollar to the 2nd TD holder seems to be Freddie’s “hard & fast rule” (heard from the “horses mouth” on speaker phone).
Not only are these 2nd TD holders likely “scotching” many “short sales,” they are also causing a months’ long tangle with the 1st in trying to effect a deed-in-lieu and some loan modifications (in which cramdown is the only way the numbers will work) for the delinquent trustor. The 2nd TD holders are part of the problem on the slowness of the “shadow inventory” to move to the next step.
These (jr. lienholder) “investors” MUST know that they will be wiped out in a non-judicial foreclosure but are playing “hardball” because they still CAN :=(
The total blame for this fiasco falls back to the first TD holder for failure to timely foreclose on seriously delinquent borrowers, no matter what state the property is in.
