Short Sales

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[SK in CV]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

[/quote]

I think maybe you misunderstand a lienholders rights with regards to deficiencly judgements. California is a one-shot state. Either the lien holder goes after the property through traditional (non-judicial) foreclosure (NOD through trustee sale) or after the borrower through a judicial foreclosure process. Can’t do both. Once there has been a foreclosure auction, it’s over with. In California, a deficiency judgement may not be obtained when the property is sold through a non-judicial public sale or if the foreclosure is related to a purchase money mortgage.

[SK in CV]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

[/quote]

I think maybe you misunderstand a lienholders rights with regards to deficiencly judgements. California is a one-shot state. Either the lien holder goes after the property through traditional (non-judicial) foreclosure (NOD through trustee sale) or after the borrower through a judicial foreclosure process. Can’t do both. Once there has been a foreclosure auction, it’s over with. In California, a deficiency judgement may not be obtained when the property is sold through a non-judicial public sale or if the foreclosure is related to a purchase money mortgage.

[SK in CV]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

[/quote]

I think maybe you misunderstand a lienholders rights with regards to deficiencly judgements. California is a one-shot state. Either the lien holder goes after the property through traditional (non-judicial) foreclosure (NOD through trustee sale) or after the borrower through a judicial foreclosure process. Can’t do both. Once there has been a foreclosure auction, it’s over with. In California, a deficiency judgement may not be obtained when the property is sold through a non-judicial public sale or if the foreclosure is related to a purchase money mortgage.

[SK in CV]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

[/quote]

I think maybe you misunderstand a lienholders rights with regards to deficiencly judgements. California is a one-shot state. Either the lien holder goes after the property through traditional (non-judicial) foreclosure (NOD through trustee sale) or after the borrower through a judicial foreclosure process. Can’t do both. Once there has been a foreclosure auction, it’s over with. In California, a deficiency judgement may not be obtained when the property is sold through a non-judicial public sale or if the foreclosure is related to a purchase money mortgage.

[SK in CV]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

[/quote]

I think maybe you misunderstand a lienholders rights with regards to deficiencly judgements. California is a one-shot state. Either the lien holder goes after the property through traditional (non-judicial) foreclosure (NOD through trustee sale) or after the borrower through a judicial foreclosure process. Can’t do both. Once there has been a foreclosure auction, it’s over with. In California, a deficiency judgement may not be obtained when the property is sold through a non-judicial public sale or if the foreclosure is related to a purchase money mortgage.

[socrattt]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.[/quote]

Actually Pepsi, I would definitely agree to something rather than nothing. As SK mentioned there is no recourse after the auction, so here again is a viable reason why the bank should take their money before letting this go to auction.

Last I checked $1 is better than no dollars, but I suppose if there is more to the story for these banks as far as government incentives then I can understand. But at this point public knowledge would force me to believe that the 2nd lien holder is a complete knuckle head to walk away from a deal where they still get 10-20 cents on the dollar.

[socrattt]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.[/quote]

Actually Pepsi, I would definitely agree to something rather than nothing. As SK mentioned there is no recourse after the auction, so here again is a viable reason why the bank should take their money before letting this go to auction.

Last I checked $1 is better than no dollars, but I suppose if there is more to the story for these banks as far as government incentives then I can understand. But at this point public knowledge would force me to believe that the 2nd lien holder is a complete knuckle head to walk away from a deal where they still get 10-20 cents on the dollar.

[socrattt]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.[/quote]

Actually Pepsi, I would definitely agree to something rather than nothing. As SK mentioned there is no recourse after the auction, so here again is a viable reason why the bank should take their money before letting this go to auction.

Last I checked $1 is better than no dollars, but I suppose if there is more to the story for these banks as far as government incentives then I can understand. But at this point public knowledge would force me to believe that the 2nd lien holder is a complete knuckle head to walk away from a deal where they still get 10-20 cents on the dollar.

[socrattt]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.[/quote]

Actually Pepsi, I would definitely agree to something rather than nothing. As SK mentioned there is no recourse after the auction, so here again is a viable reason why the bank should take their money before letting this go to auction.

Last I checked $1 is better than no dollars, but I suppose if there is more to the story for these banks as far as government incentives then I can understand. But at this point public knowledge would force me to believe that the 2nd lien holder is a complete knuckle head to walk away from a deal where they still get 10-20 cents on the dollar.

[socrattt]

[quote=pepsi][quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.[/quote]

Actually Pepsi, I would definitely agree to something rather than nothing. As SK mentioned there is no recourse after the auction, so here again is a viable reason why the bank should take their money before letting this go to auction.

Last I checked $1 is better than no dollars, but I suppose if there is more to the story for these banks as far as government incentives then I can understand. But at this point public knowledge would force me to believe that the 2nd lien holder is a complete knuckle head to walk away from a deal where they still get 10-20 cents on the dollar.

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

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