[SD Realtor]

My discussion was entirely focusing on property taxes. Frequently the IRS liens are a different beast and much harder to identify and find. In fact I can honestly say I have NEVER seen any money in a sale of any type, short or otherwise have any proceeds at all paid to the IRS. Nor is there ANY obligation by ANY seller to disclose to the buyer or realtor that they are in trouble with the IRS. If there is a lien that has been placed on the home THEN they have to disclose that.

Of course the IRS can put a lien on your home for unpaid federal taxes if they want. The IRS can go ahead and does have the right of redemption and in the state of California that is 90 days after the recorded sale regardless of the type of sale. Furthermore a lender CANNOT (I believe) file a NOD on you if you have fallen behind and are in trouble with the IRS. I am pretty sure that is only applicable to property taxes. Your tactic to interrogate someone thoroughly especially about sensitive information such as tax history is laughably out of line. It is up to the title company to find out all of the needed information about any liens. Any decent listing agent would already have found out about any former spouses simply for the need to have a quit claim needed. Similarly that is also asked by escrow when the initial escrow package is delivered. So these gaping holes that you seem to think exist in reality do not.

Property tax liens are easily identified and never are they found out in the 11th hour. If there are other liens discovered in the 11th hour then that is a tough break but happens. If the buyer wants to deal with it and get the home then the buyer will deal with it. It has absolutely nothing to do with helping the credit score of the seller. It has to do with releasing the lien. This is how it is with short sales but I feel your posts on this and many other posts here are distorting the majority of short sales.

Similarly you make it sound as if no agents talk to clients before taking the listing which is inappropriate. Once more, the majority of them indeed do have conversations with the sellers. What tends to happen more is that sellers don’t tell the listing agent all of the information that is needed. They either minimize it, or gloss over it, and then when a pr is run and you show it to them and ask what this or that lien is about they may magically remember.

At any rate, once the pr is ready, then all should be identified. Conversely, if you are the buyer and your agent does not ask the listing agent for a copy of the estimated HUD and the PR from which it was derived then shame on your agent, not the listing agent.

[SD Realtor]

My discussion was entirely focusing on property taxes. Frequently the IRS liens are a different beast and much harder to identify and find. In fact I can honestly say I have NEVER seen any money in a sale of any type, short or otherwise have any proceeds at all paid to the IRS. Nor is there ANY obligation by ANY seller to disclose to the buyer or realtor that they are in trouble with the IRS. If there is a lien that has been placed on the home THEN they have to disclose that.

Of course the IRS can put a lien on your home for unpaid federal taxes if they want. The IRS can go ahead and does have the right of redemption and in the state of California that is 90 days after the recorded sale regardless of the type of sale. Furthermore a lender CANNOT (I believe) file a NOD on you if you have fallen behind and are in trouble with the IRS. I am pretty sure that is only applicable to property taxes. Your tactic to interrogate someone thoroughly especially about sensitive information such as tax history is laughably out of line. It is up to the title company to find out all of the needed information about any liens. Any decent listing agent would already have found out about any former spouses simply for the need to have a quit claim needed. Similarly that is also asked by escrow when the initial escrow package is delivered. So these gaping holes that you seem to think exist in reality do not.

Property tax liens are easily identified and never are they found out in the 11th hour. If there are other liens discovered in the 11th hour then that is a tough break but happens. If the buyer wants to deal with it and get the home then the buyer will deal with it. It has absolutely nothing to do with helping the credit score of the seller. It has to do with releasing the lien. This is how it is with short sales but I feel your posts on this and many other posts here are distorting the majority of short sales.

Similarly you make it sound as if no agents talk to clients before taking the listing which is inappropriate. Once more, the majority of them indeed do have conversations with the sellers. What tends to happen more is that sellers don’t tell the listing agent all of the information that is needed. They either minimize it, or gloss over it, and then when a pr is run and you show it to them and ask what this or that lien is about they may magically remember.

At any rate, once the pr is ready, then all should be identified. Conversely, if you are the buyer and your agent does not ask the listing agent for a copy of the estimated HUD and the PR from which it was derived then shame on your agent, not the listing agent.

[SD Realtor]

My discussion was entirely focusing on property taxes. Frequently the IRS liens are a different beast and much harder to identify and find. In fact I can honestly say I have NEVER seen any money in a sale of any type, short or otherwise have any proceeds at all paid to the IRS. Nor is there ANY obligation by ANY seller to disclose to the buyer or realtor that they are in trouble with the IRS. If there is a lien that has been placed on the home THEN they have to disclose that.

Of course the IRS can put a lien on your home for unpaid federal taxes if they want. The IRS can go ahead and does have the right of redemption and in the state of California that is 90 days after the recorded sale regardless of the type of sale. Furthermore a lender CANNOT (I believe) file a NOD on you if you have fallen behind and are in trouble with the IRS. I am pretty sure that is only applicable to property taxes. Your tactic to interrogate someone thoroughly especially about sensitive information such as tax history is laughably out of line. It is up to the title company to find out all of the needed information about any liens. Any decent listing agent would already have found out about any former spouses simply for the need to have a quit claim needed. Similarly that is also asked by escrow when the initial escrow package is delivered. So these gaping holes that you seem to think exist in reality do not.

Property tax liens are easily identified and never are they found out in the 11th hour. If there are other liens discovered in the 11th hour then that is a tough break but happens. If the buyer wants to deal with it and get the home then the buyer will deal with it. It has absolutely nothing to do with helping the credit score of the seller. It has to do with releasing the lien. This is how it is with short sales but I feel your posts on this and many other posts here are distorting the majority of short sales.

Similarly you make it sound as if no agents talk to clients before taking the listing which is inappropriate. Once more, the majority of them indeed do have conversations with the sellers. What tends to happen more is that sellers don’t tell the listing agent all of the information that is needed. They either minimize it, or gloss over it, and then when a pr is run and you show it to them and ask what this or that lien is about they may magically remember.

At any rate, once the pr is ready, then all should be identified. Conversely, if you are the buyer and your agent does not ask the listing agent for a copy of the estimated HUD and the PR from which it was derived then shame on your agent, not the listing agent.

[SD Realtor]

My discussion was entirely focusing on property taxes. Frequently the IRS liens are a different beast and much harder to identify and find. In fact I can honestly say I have NEVER seen any money in a sale of any type, short or otherwise have any proceeds at all paid to the IRS. Nor is there ANY obligation by ANY seller to disclose to the buyer or realtor that they are in trouble with the IRS. If there is a lien that has been placed on the home THEN they have to disclose that.

Of course the IRS can put a lien on your home for unpaid federal taxes if they want. The IRS can go ahead and does have the right of redemption and in the state of California that is 90 days after the recorded sale regardless of the type of sale. Furthermore a lender CANNOT (I believe) file a NOD on you if you have fallen behind and are in trouble with the IRS. I am pretty sure that is only applicable to property taxes. Your tactic to interrogate someone thoroughly especially about sensitive information such as tax history is laughably out of line. It is up to the title company to find out all of the needed information about any liens. Any decent listing agent would already have found out about any former spouses simply for the need to have a quit claim needed. Similarly that is also asked by escrow when the initial escrow package is delivered. So these gaping holes that you seem to think exist in reality do not.

Property tax liens are easily identified and never are they found out in the 11th hour. If there are other liens discovered in the 11th hour then that is a tough break but happens. If the buyer wants to deal with it and get the home then the buyer will deal with it. It has absolutely nothing to do with helping the credit score of the seller. It has to do with releasing the lien. This is how it is with short sales but I feel your posts on this and many other posts here are distorting the majority of short sales.

Similarly you make it sound as if no agents talk to clients before taking the listing which is inappropriate. Once more, the majority of them indeed do have conversations with the sellers. What tends to happen more is that sellers don’t tell the listing agent all of the information that is needed. They either minimize it, or gloss over it, and then when a pr is run and you show it to them and ask what this or that lien is about they may magically remember.

At any rate, once the pr is ready, then all should be identified. Conversely, if you are the buyer and your agent does not ask the listing agent for a copy of the estimated HUD and the PR from which it was derived then shame on your agent, not the listing agent.

[SD Realtor]

CAR I understand your point but I dont agree with what you say about “That is the point about being in the first position”

No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.

The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman.

The lender holding the top position has the right to take as much as they want from the proceeds given the fact that anyone above them, (such as the taxman is paid) off. Now as you said, and sdr validated of course they are informed of any money transfering to subordinate lienholders no matter where the money comes from as it is in the final HUD which they authorize PRIOR to authorizing escrow to record the sale.

As far as some of these posts about bribes going to the sellers and loan officer/realtors selling the home and defrauding the banks, that may exist but for someone to state these are not very exceptional cases is incorrect. Furthermore most (but not all) realtors would be placing themselves in a SEVERE position of liability if they knew of direct money transfers and backdooring between buyers/sellers. Does it happen? Perhaps but nowhere near as much as some presuppose.

Anyways I know you are simply wishing for a more transparent system and in the end, the system is pretty darn transparent. It is however very frustrating and in some cases, yes, buyers will have to put forth extra money or be enterprising in some way to make themselves more competitive. In the end though it is all on the HUD.

I just want to reiterate again, the inherent “right” of a lienholder is really that they can choose to release a lien, or not release a lien. That is it. Now that lienholder (in making the decision to release a lien) may have specific guidelines such as knowing exactly where all proceeds go. This is why they demand an estimated HUD with the short sale package when making an initial evaluation. Then a final HUD before ultimately letting it go.

[SD Realtor]

CAR I understand your point but I dont agree with what you say about “That is the point about being in the first position”

No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.

The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman.

The lender holding the top position has the right to take as much as they want from the proceeds given the fact that anyone above them, (such as the taxman is paid) off. Now as you said, and sdr validated of course they are informed of any money transfering to subordinate lienholders no matter where the money comes from as it is in the final HUD which they authorize PRIOR to authorizing escrow to record the sale.

As far as some of these posts about bribes going to the sellers and loan officer/realtors selling the home and defrauding the banks, that may exist but for someone to state these are not very exceptional cases is incorrect. Furthermore most (but not all) realtors would be placing themselves in a SEVERE position of liability if they knew of direct money transfers and backdooring between buyers/sellers. Does it happen? Perhaps but nowhere near as much as some presuppose.

Anyways I know you are simply wishing for a more transparent system and in the end, the system is pretty darn transparent. It is however very frustrating and in some cases, yes, buyers will have to put forth extra money or be enterprising in some way to make themselves more competitive. In the end though it is all on the HUD.

I just want to reiterate again, the inherent “right” of a lienholder is really that they can choose to release a lien, or not release a lien. That is it. Now that lienholder (in making the decision to release a lien) may have specific guidelines such as knowing exactly where all proceeds go. This is why they demand an estimated HUD with the short sale package when making an initial evaluation. Then a final HUD before ultimately letting it go.

[SD Realtor]

CAR I understand your point but I dont agree with what you say about “That is the point about being in the first position”

No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.

The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman.

The lender holding the top position has the right to take as much as they want from the proceeds given the fact that anyone above them, (such as the taxman is paid) off. Now as you said, and sdr validated of course they are informed of any money transfering to subordinate lienholders no matter where the money comes from as it is in the final HUD which they authorize PRIOR to authorizing escrow to record the sale.

As far as some of these posts about bribes going to the sellers and loan officer/realtors selling the home and defrauding the banks, that may exist but for someone to state these are not very exceptional cases is incorrect. Furthermore most (but not all) realtors would be placing themselves in a SEVERE position of liability if they knew of direct money transfers and backdooring between buyers/sellers. Does it happen? Perhaps but nowhere near as much as some presuppose.

Anyways I know you are simply wishing for a more transparent system and in the end, the system is pretty darn transparent. It is however very frustrating and in some cases, yes, buyers will have to put forth extra money or be enterprising in some way to make themselves more competitive. In the end though it is all on the HUD.

I just want to reiterate again, the inherent “right” of a lienholder is really that they can choose to release a lien, or not release a lien. That is it. Now that lienholder (in making the decision to release a lien) may have specific guidelines such as knowing exactly where all proceeds go. This is why they demand an estimated HUD with the short sale package when making an initial evaluation. Then a final HUD before ultimately letting it go.

[SD Realtor]

CAR I understand your point but I dont agree with what you say about “That is the point about being in the first position”

No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.

The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman.

The lender holding the top position has the right to take as much as they want from the proceeds given the fact that anyone above them, (such as the taxman is paid) off. Now as you said, and sdr validated of course they are informed of any money transfering to subordinate lienholders no matter where the money comes from as it is in the final HUD which they authorize PRIOR to authorizing escrow to record the sale.

As far as some of these posts about bribes going to the sellers and loan officer/realtors selling the home and defrauding the banks, that may exist but for someone to state these are not very exceptional cases is incorrect. Furthermore most (but not all) realtors would be placing themselves in a SEVERE position of liability if they knew of direct money transfers and backdooring between buyers/sellers. Does it happen? Perhaps but nowhere near as much as some presuppose.

Anyways I know you are simply wishing for a more transparent system and in the end, the system is pretty darn transparent. It is however very frustrating and in some cases, yes, buyers will have to put forth extra money or be enterprising in some way to make themselves more competitive. In the end though it is all on the HUD.

I just want to reiterate again, the inherent “right” of a lienholder is really that they can choose to release a lien, or not release a lien. That is it. Now that lienholder (in making the decision to release a lien) may have specific guidelines such as knowing exactly where all proceeds go. This is why they demand an estimated HUD with the short sale package when making an initial evaluation. Then a final HUD before ultimately letting it go.

[SD Realtor]

CAR I understand your point but I dont agree with what you say about “That is the point about being in the first position”

No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.

The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman.

The lender holding the top position has the right to take as much as they want from the proceeds given the fact that anyone above them, (such as the taxman is paid) off. Now as you said, and sdr validated of course they are informed of any money transfering to subordinate lienholders no matter where the money comes from as it is in the final HUD which they authorize PRIOR to authorizing escrow to record the sale.

As far as some of these posts about bribes going to the sellers and loan officer/realtors selling the home and defrauding the banks, that may exist but for someone to state these are not very exceptional cases is incorrect. Furthermore most (but not all) realtors would be placing themselves in a SEVERE position of liability if they knew of direct money transfers and backdooring between buyers/sellers. Does it happen? Perhaps but nowhere near as much as some presuppose.

Anyways I know you are simply wishing for a more transparent system and in the end, the system is pretty darn transparent. It is however very frustrating and in some cases, yes, buyers will have to put forth extra money or be enterprising in some way to make themselves more competitive. In the end though it is all on the HUD.

I just want to reiterate again, the inherent “right” of a lienholder is really that they can choose to release a lien, or not release a lien. That is it. Now that lienholder (in making the decision to release a lien) may have specific guidelines such as knowing exactly where all proceeds go. This is why they demand an estimated HUD with the short sale package when making an initial evaluation. Then a final HUD before ultimately letting it go.

[SD Realtor]

CAR I think that your use of terminology is loose and does not accurately describe the situation. I am not saying there is not a problem, but let’s make sure we are correct in what is going on.

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

What must happen in order for the home to convey is the release of all liens. These are typically held by lenders, (first position, second position, etc) but may also include HOA, mechanics, and of course the taxman.

The fact is that anybody that holds a lien on the property has the right to NOT RELEASE that lien. It may be a pet peeve of yours but that is the reality of the situation. If you want to wipe out the idea of home equity loans and second mortgages then so be it, however wiping out the right of a lienholder to HOLD THE LIEN is contrary to what a lien is all about.

The bottom line is that if a second does not want to release a lien, they do not, or should not have to. If the property goes to foreclosure that second lienholder has the right to purchase that home at trustee sale and make a profit on it. Why shouldn’t they? In no way should they be forced to bow down to a first lienholder at all. If the numbers work better the other way it makes way more sense for the seconds to abstain and let the foreclosure go through.

Once more if the INSTITUTIONS were not backstopped and pumped full of money they may be much more apt to have rolled over and taken the money. However most second lienholders have already written off the defaulted second anyway so they are playing with house money and don’t give a hoot if they hold up the short sale.

In one sense I agree and am frustrated by the process but in another way eliminating the position of a lienholder and forcing them to forfeit the lien altogether based on a higher priority lien making more profit is not right.

So lets go back to the point you were making. It is up to the lienholder in the first position to decide what they want to do in order to make the sale happen. If they only want to dole out a litle bit to the second lienholder then they can make that choice and risk that the sale will not happen because the second will not release the lien. If they want to dole out more then they can.

Now what the FBI may or may not be investigating are cases of fraud where payouts were made and not reflected in the final HUD. I have had some cases where extra money was needed from someone to get the second to rollover. Whether it came from the first, either broker in terms of reduced commission, or the buyer or seller, it came and it was recorded in the final HUD.

So could there be a better process? Yes and there should be but there is not.

My take would have been instead of the government backstopping the lenders so that the lenders had no incentive to make deals, maybe the govt should have simply provided staff to make the decisions and take it out of the lenders hands in exchange for that backstop money. They could have developed guidelines that were percentage based or something like that.

It really is not rocket science.

[SD Realtor]

CAR I think that your use of terminology is loose and does not accurately describe the situation. I am not saying there is not a problem, but let’s make sure we are correct in what is going on.

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

What must happen in order for the home to convey is the release of all liens. These are typically held by lenders, (first position, second position, etc) but may also include HOA, mechanics, and of course the taxman.

The fact is that anybody that holds a lien on the property has the right to NOT RELEASE that lien. It may be a pet peeve of yours but that is the reality of the situation. If you want to wipe out the idea of home equity loans and second mortgages then so be it, however wiping out the right of a lienholder to HOLD THE LIEN is contrary to what a lien is all about.

The bottom line is that if a second does not want to release a lien, they do not, or should not have to. If the property goes to foreclosure that second lienholder has the right to purchase that home at trustee sale and make a profit on it. Why shouldn’t they? In no way should they be forced to bow down to a first lienholder at all. If the numbers work better the other way it makes way more sense for the seconds to abstain and let the foreclosure go through.

Once more if the INSTITUTIONS were not backstopped and pumped full of money they may be much more apt to have rolled over and taken the money. However most second lienholders have already written off the defaulted second anyway so they are playing with house money and don’t give a hoot if they hold up the short sale.

In one sense I agree and am frustrated by the process but in another way eliminating the position of a lienholder and forcing them to forfeit the lien altogether based on a higher priority lien making more profit is not right.

So lets go back to the point you were making. It is up to the lienholder in the first position to decide what they want to do in order to make the sale happen. If they only want to dole out a litle bit to the second lienholder then they can make that choice and risk that the sale will not happen because the second will not release the lien. If they want to dole out more then they can.

Now what the FBI may or may not be investigating are cases of fraud where payouts were made and not reflected in the final HUD. I have had some cases where extra money was needed from someone to get the second to rollover. Whether it came from the first, either broker in terms of reduced commission, or the buyer or seller, it came and it was recorded in the final HUD.

So could there be a better process? Yes and there should be but there is not.

My take would have been instead of the government backstopping the lenders so that the lenders had no incentive to make deals, maybe the govt should have simply provided staff to make the decisions and take it out of the lenders hands in exchange for that backstop money. They could have developed guidelines that were percentage based or something like that.

It really is not rocket science.

[SD Realtor]

CAR I think that your use of terminology is loose and does not accurately describe the situation. I am not saying there is not a problem, but let’s make sure we are correct in what is going on.

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

What must happen in order for the home to convey is the release of all liens. These are typically held by lenders, (first position, second position, etc) but may also include HOA, mechanics, and of course the taxman.

The fact is that anybody that holds a lien on the property has the right to NOT RELEASE that lien. It may be a pet peeve of yours but that is the reality of the situation. If you want to wipe out the idea of home equity loans and second mortgages then so be it, however wiping out the right of a lienholder to HOLD THE LIEN is contrary to what a lien is all about.

The bottom line is that if a second does not want to release a lien, they do not, or should not have to. If the property goes to foreclosure that second lienholder has the right to purchase that home at trustee sale and make a profit on it. Why shouldn’t they? In no way should they be forced to bow down to a first lienholder at all. If the numbers work better the other way it makes way more sense for the seconds to abstain and let the foreclosure go through.

Once more if the INSTITUTIONS were not backstopped and pumped full of money they may be much more apt to have rolled over and taken the money. However most second lienholders have already written off the defaulted second anyway so they are playing with house money and don’t give a hoot if they hold up the short sale.

In one sense I agree and am frustrated by the process but in another way eliminating the position of a lienholder and forcing them to forfeit the lien altogether based on a higher priority lien making more profit is not right.

So lets go back to the point you were making. It is up to the lienholder in the first position to decide what they want to do in order to make the sale happen. If they only want to dole out a litle bit to the second lienholder then they can make that choice and risk that the sale will not happen because the second will not release the lien. If they want to dole out more then they can.

Now what the FBI may or may not be investigating are cases of fraud where payouts were made and not reflected in the final HUD. I have had some cases where extra money was needed from someone to get the second to rollover. Whether it came from the first, either broker in terms of reduced commission, or the buyer or seller, it came and it was recorded in the final HUD.

So could there be a better process? Yes and there should be but there is not.

My take would have been instead of the government backstopping the lenders so that the lenders had no incentive to make deals, maybe the govt should have simply provided staff to make the decisions and take it out of the lenders hands in exchange for that backstop money. They could have developed guidelines that were percentage based or something like that.

It really is not rocket science.

[SD Realtor]

CAR I think that your use of terminology is loose and does not accurately describe the situation. I am not saying there is not a problem, but let’s make sure we are correct in what is going on.

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

What must happen in order for the home to convey is the release of all liens. These are typically held by lenders, (first position, second position, etc) but may also include HOA, mechanics, and of course the taxman.

The fact is that anybody that holds a lien on the property has the right to NOT RELEASE that lien. It may be a pet peeve of yours but that is the reality of the situation. If you want to wipe out the idea of home equity loans and second mortgages then so be it, however wiping out the right of a lienholder to HOLD THE LIEN is contrary to what a lien is all about.

The bottom line is that if a second does not want to release a lien, they do not, or should not have to. If the property goes to foreclosure that second lienholder has the right to purchase that home at trustee sale and make a profit on it. Why shouldn’t they? In no way should they be forced to bow down to a first lienholder at all. If the numbers work better the other way it makes way more sense for the seconds to abstain and let the foreclosure go through.

Once more if the INSTITUTIONS were not backstopped and pumped full of money they may be much more apt to have rolled over and taken the money. However most second lienholders have already written off the defaulted second anyway so they are playing with house money and don’t give a hoot if they hold up the short sale.

In one sense I agree and am frustrated by the process but in another way eliminating the position of a lienholder and forcing them to forfeit the lien altogether based on a higher priority lien making more profit is not right.

So lets go back to the point you were making. It is up to the lienholder in the first position to decide what they want to do in order to make the sale happen. If they only want to dole out a litle bit to the second lienholder then they can make that choice and risk that the sale will not happen because the second will not release the lien. If they want to dole out more then they can.

Now what the FBI may or may not be investigating are cases of fraud where payouts were made and not reflected in the final HUD. I have had some cases where extra money was needed from someone to get the second to rollover. Whether it came from the first, either broker in terms of reduced commission, or the buyer or seller, it came and it was recorded in the final HUD.

So could there be a better process? Yes and there should be but there is not.

My take would have been instead of the government backstopping the lenders so that the lenders had no incentive to make deals, maybe the govt should have simply provided staff to make the decisions and take it out of the lenders hands in exchange for that backstop money. They could have developed guidelines that were percentage based or something like that.

It really is not rocket science.

[SD Realtor]

CAR I think that your use of terminology is loose and does not accurately describe the situation. I am not saying there is not a problem, but let’s make sure we are correct in what is going on.

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

What must happen in order for the home to convey is the release of all liens. These are typically held by lenders, (first position, second position, etc) but may also include HOA, mechanics, and of course the taxman.

The fact is that anybody that holds a lien on the property has the right to NOT RELEASE that lien. It may be a pet peeve of yours but that is the reality of the situation. If you want to wipe out the idea of home equity loans and second mortgages then so be it, however wiping out the right of a lienholder to HOLD THE LIEN is contrary to what a lien is all about.

The bottom line is that if a second does not want to release a lien, they do not, or should not have to. If the property goes to foreclosure that second lienholder has the right to purchase that home at trustee sale and make a profit on it. Why shouldn’t they? In no way should they be forced to bow down to a first lienholder at all. If the numbers work better the other way it makes way more sense for the seconds to abstain and let the foreclosure go through.

Once more if the INSTITUTIONS were not backstopped and pumped full of money they may be much more apt to have rolled over and taken the money. However most second lienholders have already written off the defaulted second anyway so they are playing with house money and don’t give a hoot if they hold up the short sale.

In one sense I agree and am frustrated by the process but in another way eliminating the position of a lienholder and forcing them to forfeit the lien altogether based on a higher priority lien making more profit is not right.

So lets go back to the point you were making. It is up to the lienholder in the first position to decide what they want to do in order to make the sale happen. If they only want to dole out a litle bit to the second lienholder then they can make that choice and risk that the sale will not happen because the second will not release the lien. If they want to dole out more then they can.

Now what the FBI may or may not be investigating are cases of fraud where payouts were made and not reflected in the final HUD. I have had some cases where extra money was needed from someone to get the second to rollover. Whether it came from the first, either broker in terms of reduced commission, or the buyer or seller, it came and it was recorded in the final HUD.

So could there be a better process? Yes and there should be but there is not.

My take would have been instead of the government backstopping the lenders so that the lenders had no incentive to make deals, maybe the govt should have simply provided staff to make the decisions and take it out of the lenders hands in exchange for that backstop money. They could have developed guidelines that were percentage based or something like that.

It really is not rocket science.

[SD Realtor]

pr I did some research and now do agree that a flat tax will not provide a matching revenue that the current progressive tax supplies. I am also not in the camp of a VAT or fair tax so with that said, I do agree with you that the progressive tax rate is the most beneficial methodology to date.

With that said I also believe we need to cut spending pretty substantially.

[Author]

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