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November 28, 2010 at 12:51 PM #18228November 28, 2010 at 6:09 PM #633678bearishgurlParticipant
[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).
See my last post yesterday in: http://piggington.com/legal_perspective_on_the_re_fiasco
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.
November 28, 2010 at 6:09 PM #633757bearishgurlParticipant[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).
See my last post yesterday in: http://piggington.com/legal_perspective_on_the_re_fiasco
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.
November 28, 2010 at 6:09 PM #634331bearishgurlParticipant[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).
See my last post yesterday in: http://piggington.com/legal_perspective_on_the_re_fiasco
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.
November 28, 2010 at 6:09 PM #634462bearishgurlParticipant[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).
See my last post yesterday in: http://piggington.com/legal_perspective_on_the_re_fiasco
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.
November 28, 2010 at 6:09 PM #634782bearishgurlParticipant[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).
See my last post yesterday in: http://piggington.com/legal_perspective_on_the_re_fiasco
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.
November 29, 2010 at 7:58 PM #633934jficquetteParticipantWhat’s happened to our country?? Creditors actually expecting to get paid? WTF???
November 29, 2010 at 7:58 PM #634012jficquetteParticipantWhat’s happened to our country?? Creditors actually expecting to get paid? WTF???
November 29, 2010 at 7:58 PM #634585jficquetteParticipantWhat’s happened to our country?? Creditors actually expecting to get paid? WTF???
November 29, 2010 at 7:58 PM #634715jficquetteParticipantWhat’s happened to our country?? Creditors actually expecting to get paid? WTF???
November 29, 2010 at 7:58 PM #635036jficquetteParticipantWhat’s happened to our country?? Creditors actually expecting to get paid? WTF???
November 30, 2010 at 2:37 PM #634244SD RealtorParticipantI think it is a bit of an oversimplification of the assignment of blame. Obviously every case is different and while most would assume a delinquent homeowner stops paying both lenders at the same time, it is not a given.
I think what is missed in your analysis bearish is the importance of what has or has not already been written off. That is, if the second already has written the loan off then what do they care if the home forecloses or not. Lets say there are 20 portfolios written off. In my opinion this has much more bearing on the attitude of the second. Furthermore what you did not mention was the payoff from the first. Take a 400k payoff. Say the first was a 550k loan and the second was 90k. Now the home sells for 430k and after closing there is 400k left. So the first offers 3k to the second and keeps the 397k. So why wouldn’t the second try to get more? Now if they use this strategy on 20 portfolios will they get more by playing hardball rather then rolling over for 3k on each one? Obviously there stats show that the answer is yes.
Anyways yes the total blame does fall on the first but it doesn’t matter if the first forecloses quick or not, the second still needs to release the lien. Perhaps if banks were not all bloated with bailout money seconds would not be playing so much hardball eh?
There is plenty of blame to go around for all parties. I had a short sale once upon a time and the first was Wells Fargo Bank and the second was Wells Home Equity and the whole thing almost crashed and burned because Wells Bank would not give Wells Home Equity more then 3k. It is a joke but a very sad joke.
November 30, 2010 at 2:37 PM #634323SD RealtorParticipantI think it is a bit of an oversimplification of the assignment of blame. Obviously every case is different and while most would assume a delinquent homeowner stops paying both lenders at the same time, it is not a given.
I think what is missed in your analysis bearish is the importance of what has or has not already been written off. That is, if the second already has written the loan off then what do they care if the home forecloses or not. Lets say there are 20 portfolios written off. In my opinion this has much more bearing on the attitude of the second. Furthermore what you did not mention was the payoff from the first. Take a 400k payoff. Say the first was a 550k loan and the second was 90k. Now the home sells for 430k and after closing there is 400k left. So the first offers 3k to the second and keeps the 397k. So why wouldn’t the second try to get more? Now if they use this strategy on 20 portfolios will they get more by playing hardball rather then rolling over for 3k on each one? Obviously there stats show that the answer is yes.
Anyways yes the total blame does fall on the first but it doesn’t matter if the first forecloses quick or not, the second still needs to release the lien. Perhaps if banks were not all bloated with bailout money seconds would not be playing so much hardball eh?
There is plenty of blame to go around for all parties. I had a short sale once upon a time and the first was Wells Fargo Bank and the second was Wells Home Equity and the whole thing almost crashed and burned because Wells Bank would not give Wells Home Equity more then 3k. It is a joke but a very sad joke.
November 30, 2010 at 2:37 PM #634898SD RealtorParticipantI think it is a bit of an oversimplification of the assignment of blame. Obviously every case is different and while most would assume a delinquent homeowner stops paying both lenders at the same time, it is not a given.
I think what is missed in your analysis bearish is the importance of what has or has not already been written off. That is, if the second already has written the loan off then what do they care if the home forecloses or not. Lets say there are 20 portfolios written off. In my opinion this has much more bearing on the attitude of the second. Furthermore what you did not mention was the payoff from the first. Take a 400k payoff. Say the first was a 550k loan and the second was 90k. Now the home sells for 430k and after closing there is 400k left. So the first offers 3k to the second and keeps the 397k. So why wouldn’t the second try to get more? Now if they use this strategy on 20 portfolios will they get more by playing hardball rather then rolling over for 3k on each one? Obviously there stats show that the answer is yes.
Anyways yes the total blame does fall on the first but it doesn’t matter if the first forecloses quick or not, the second still needs to release the lien. Perhaps if banks were not all bloated with bailout money seconds would not be playing so much hardball eh?
There is plenty of blame to go around for all parties. I had a short sale once upon a time and the first was Wells Fargo Bank and the second was Wells Home Equity and the whole thing almost crashed and burned because Wells Bank would not give Wells Home Equity more then 3k. It is a joke but a very sad joke.
November 30, 2010 at 2:37 PM #635027SD RealtorParticipantI think it is a bit of an oversimplification of the assignment of blame. Obviously every case is different and while most would assume a delinquent homeowner stops paying both lenders at the same time, it is not a given.
I think what is missed in your analysis bearish is the importance of what has or has not already been written off. That is, if the second already has written the loan off then what do they care if the home forecloses or not. Lets say there are 20 portfolios written off. In my opinion this has much more bearing on the attitude of the second. Furthermore what you did not mention was the payoff from the first. Take a 400k payoff. Say the first was a 550k loan and the second was 90k. Now the home sells for 430k and after closing there is 400k left. So the first offers 3k to the second and keeps the 397k. So why wouldn’t the second try to get more? Now if they use this strategy on 20 portfolios will they get more by playing hardball rather then rolling over for 3k on each one? Obviously there stats show that the answer is yes.
Anyways yes the total blame does fall on the first but it doesn’t matter if the first forecloses quick or not, the second still needs to release the lien. Perhaps if banks were not all bloated with bailout money seconds would not be playing so much hardball eh?
There is plenty of blame to go around for all parties. I had a short sale once upon a time and the first was Wells Fargo Bank and the second was Wells Home Equity and the whole thing almost crashed and burned because Wells Bank would not give Wells Home Equity more then 3k. It is a joke but a very sad joke.
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