Short Sale: 2nd lender=extortionist?

[MrsKryten]

Hi all,

First-time home buying noob here and I’ve been interested in buying a particular house for over a year now. It’s a short sale and has two lenders. I just found out that the 1st lender finally approved the short sale. Yea! Here’s where things get a little sketchy though and I felt the need to ask the forum some questions as well as partially vent. It sounds like the 2nd lender will approve the sale if I pay them $20K in cash to settle deficiencies. What???!!!

We’re waiting to get more details as to what they’re specifically asking for but at first blush, I feel like I’m being extorted by the 2nd lender. I tried reading up on this and it sounds like if the 1st lender is aware of the “payoff,” then it’s okay but it is fraud if the payment is not disclosed to them. I really want this house but we’re telling them to pound sand if it’s not on the up and up.

I’m jumping to conclusions here but how can a big bank get away with this if it’s not legit? Which agency would handle these type of complaints?

[SD Realtor]

Your case is not out of the ordinary. The second lender doesn’t care where they get the money. It can come from the seller, it can come from the first lender, it can come from you. They just want the money.

Since the first will not pay it, and the seller will not pay it, then you are next on the list.

**********

It is in all likelihood legit…. When you close escrow, where all the money went will be on the HUD report including which lender got what monies.

**********

Think about it this way, each lender is owed money. There are no gaurantees, (with the way short sales are done now) what EACH lender will accept as a payoff. If anyone ever implied to you otherwise they were incorrect. Your offer was submitted to each lender and each lender responded with a response. You were not defrauded at all. Did anyone ever imply to you that each lender would simply take what you offered?

**********

Your recourse is as follows:

1 – You agree to pony up and pay the second off the 20k you like.

2 – You make an offer, maybe to pay half of it and ask the agents to kick in some of their commissions and maybe the sellers as well.

3 – You ask your agent to ask the listing agent to demand that the first lender payout more of their proceeds to the second lender.

4 – You call their bluff and walk.

************

Note that the second is playing a poker game right? If the home goes to foreclosure the second gets screwed and gets nothing. So would they rather have a few thousand bucks or get nothing? Unfortunately the market is so crazy here in town that more then likely someone will pony up the money if you do not want to. That is the risk the second lender is willing to take.

************

I am sorry to be blunt but it is the way the market is right now out here. It frustrates all parties involved as well.

Unfortunately I do not believe anyone has defrauded you in any manner.

[SD Realtor]

Your case is not out of the ordinary. The second lender doesn’t care where they get the money. It can come from the seller, it can come from the first lender, it can come from you. They just want the money.

Since the first will not pay it, and the seller will not pay it, then you are next on the list.

**********

It is in all likelihood legit…. When you close escrow, where all the money went will be on the HUD report including which lender got what monies.

**********

Think about it this way, each lender is owed money. There are no gaurantees, (with the way short sales are done now) what EACH lender will accept as a payoff. If anyone ever implied to you otherwise they were incorrect. Your offer was submitted to each lender and each lender responded with a response. You were not defrauded at all. Did anyone ever imply to you that each lender would simply take what you offered?

**********

Your recourse is as follows:

1 – You agree to pony up and pay the second off the 20k you like.

2 – You make an offer, maybe to pay half of it and ask the agents to kick in some of their commissions and maybe the sellers as well.

3 – You ask your agent to ask the listing agent to demand that the first lender payout more of their proceeds to the second lender.

4 – You call their bluff and walk.

************

Note that the second is playing a poker game right? If the home goes to foreclosure the second gets screwed and gets nothing. So would they rather have a few thousand bucks or get nothing? Unfortunately the market is so crazy here in town that more then likely someone will pony up the money if you do not want to. That is the risk the second lender is willing to take.

************

I am sorry to be blunt but it is the way the market is right now out here. It frustrates all parties involved as well.

Unfortunately I do not believe anyone has defrauded you in any manner.

[SD Realtor]

Your case is not out of the ordinary. The second lender doesn’t care where they get the money. It can come from the seller, it can come from the first lender, it can come from you. They just want the money.

Since the first will not pay it, and the seller will not pay it, then you are next on the list.

**********

It is in all likelihood legit…. When you close escrow, where all the money went will be on the HUD report including which lender got what monies.

**********

Think about it this way, each lender is owed money. There are no gaurantees, (with the way short sales are done now) what EACH lender will accept as a payoff. If anyone ever implied to you otherwise they were incorrect. Your offer was submitted to each lender and each lender responded with a response. You were not defrauded at all. Did anyone ever imply to you that each lender would simply take what you offered?

**********

Your recourse is as follows:

1 – You agree to pony up and pay the second off the 20k you like.

2 – You make an offer, maybe to pay half of it and ask the agents to kick in some of their commissions and maybe the sellers as well.

3 – You ask your agent to ask the listing agent to demand that the first lender payout more of their proceeds to the second lender.

4 – You call their bluff and walk.

************

Note that the second is playing a poker game right? If the home goes to foreclosure the second gets screwed and gets nothing. So would they rather have a few thousand bucks or get nothing? Unfortunately the market is so crazy here in town that more then likely someone will pony up the money if you do not want to. That is the risk the second lender is willing to take.

************

I am sorry to be blunt but it is the way the market is right now out here. It frustrates all parties involved as well.

Unfortunately I do not believe anyone has defrauded you in any manner.

[SD Realtor]

Your case is not out of the ordinary. The second lender doesn’t care where they get the money. It can come from the seller, it can come from the first lender, it can come from you. They just want the money.

Since the first will not pay it, and the seller will not pay it, then you are next on the list.

**********

It is in all likelihood legit…. When you close escrow, where all the money went will be on the HUD report including which lender got what monies.

**********

Think about it this way, each lender is owed money. There are no gaurantees, (with the way short sales are done now) what EACH lender will accept as a payoff. If anyone ever implied to you otherwise they were incorrect. Your offer was submitted to each lender and each lender responded with a response. You were not defrauded at all. Did anyone ever imply to you that each lender would simply take what you offered?

**********

Your recourse is as follows:

1 – You agree to pony up and pay the second off the 20k you like.

2 – You make an offer, maybe to pay half of it and ask the agents to kick in some of their commissions and maybe the sellers as well.

3 – You ask your agent to ask the listing agent to demand that the first lender payout more of their proceeds to the second lender.

4 – You call their bluff and walk.

************

Note that the second is playing a poker game right? If the home goes to foreclosure the second gets screwed and gets nothing. So would they rather have a few thousand bucks or get nothing? Unfortunately the market is so crazy here in town that more then likely someone will pony up the money if you do not want to. That is the risk the second lender is willing to take.

************

I am sorry to be blunt but it is the way the market is right now out here. It frustrates all parties involved as well.

Unfortunately I do not believe anyone has defrauded you in any manner.

[SD Realtor]

Your case is not out of the ordinary. The second lender doesn’t care where they get the money. It can come from the seller, it can come from the first lender, it can come from you. They just want the money.

Since the first will not pay it, and the seller will not pay it, then you are next on the list.

**********

It is in all likelihood legit…. When you close escrow, where all the money went will be on the HUD report including which lender got what monies.

**********

Think about it this way, each lender is owed money. There are no gaurantees, (with the way short sales are done now) what EACH lender will accept as a payoff. If anyone ever implied to you otherwise they were incorrect. Your offer was submitted to each lender and each lender responded with a response. You were not defrauded at all. Did anyone ever imply to you that each lender would simply take what you offered?

**********

Your recourse is as follows:

1 – You agree to pony up and pay the second off the 20k you like.

2 – You make an offer, maybe to pay half of it and ask the agents to kick in some of their commissions and maybe the sellers as well.

3 – You ask your agent to ask the listing agent to demand that the first lender payout more of their proceeds to the second lender.

4 – You call their bluff and walk.

************

Note that the second is playing a poker game right? If the home goes to foreclosure the second gets screwed and gets nothing. So would they rather have a few thousand bucks or get nothing? Unfortunately the market is so crazy here in town that more then likely someone will pony up the money if you do not want to. That is the risk the second lender is willing to take.

************

I am sorry to be blunt but it is the way the market is right now out here. It frustrates all parties involved as well.

Unfortunately I do not believe anyone has defrauded you in any manner.

[DataAgent]

How is this extortion? The 2nd lender has legal rights to the property. They are offering to release those rights at a discount to the owed amount. Sounds like you’re getting a good deal.

[DataAgent]

How is this extortion? The 2nd lender has legal rights to the property. They are offering to release those rights at a discount to the owed amount. Sounds like you’re getting a good deal.

[DataAgent]

How is this extortion? The 2nd lender has legal rights to the property. They are offering to release those rights at a discount to the owed amount. Sounds like you’re getting a good deal.

[DataAgent]

How is this extortion? The 2nd lender has legal rights to the property. They are offering to release those rights at a discount to the owed amount. Sounds like you’re getting a good deal.

[DataAgent]

How is this extortion? The 2nd lender has legal rights to the property. They are offering to release those rights at a discount to the owed amount. Sounds like you’re getting a good deal.

[UCGal]

Jim the Realtor has posted about some not-so-legit cases – where it’s NOT listed on the HUD report.

I think the OP has the right attitude – to not do it if it’s not recorded and listed.

From what I’ve read – there are times the 1st lender figures if you’ve got $20k more – they get it… After all, they’re first in line.

What it comes down to – is it still in the price range you’re willing to pay at $20k more. Can you get the 1st to accept payment to the 2nd… If both of those are ok – then go for it.

[UCGal]

Jim the Realtor has posted about some not-so-legit cases – where it’s NOT listed on the HUD report.

I think the OP has the right attitude – to not do it if it’s not recorded and listed.

From what I’ve read – there are times the 1st lender figures if you’ve got $20k more – they get it… After all, they’re first in line.

What it comes down to – is it still in the price range you’re willing to pay at $20k more. Can you get the 1st to accept payment to the 2nd… If both of those are ok – then go for it.

[UCGal]

Jim the Realtor has posted about some not-so-legit cases – where it’s NOT listed on the HUD report.

I think the OP has the right attitude – to not do it if it’s not recorded and listed.

From what I’ve read – there are times the 1st lender figures if you’ve got $20k more – they get it… After all, they’re first in line.

What it comes down to – is it still in the price range you’re willing to pay at $20k more. Can you get the 1st to accept payment to the 2nd… If both of those are ok – then go for it.

[UCGal]

Jim the Realtor has posted about some not-so-legit cases – where it’s NOT listed on the HUD report.

I think the OP has the right attitude – to not do it if it’s not recorded and listed.

From what I’ve read – there are times the 1st lender figures if you’ve got $20k more – they get it… After all, they’re first in line.

What it comes down to – is it still in the price range you’re willing to pay at $20k more. Can you get the 1st to accept payment to the 2nd… If both of those are ok – then go for it.

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