WaMu vs. HSBC - Free Foreclosure Help - Loan Modification Help

GARRETT · #1 (**permalink**) 10-31-2007, 10:00 AM

I am in the process of negotiating a short sale with WaMu who is the 1st lienholder. I have an approval with 2nd (HSBC) but found out after the approval that WaMu will only consider the short sale if the 2nd only nets $1k. The 2nd now will not budge. I am not quite sure of my options... I have an investor that is interested in taking over the 2nd for the approval amount which is 10% of the loan balance. Will the 2nd accept a reduced payment from a 3rd party if settlement does not occur?

Corey1023 · #2 (**permalink**) 11-07-2007, 10:47 AM

any time the 1st is taking a loss, its standard for them to only allow 1k-2500 to any Jr lien's. This is why you always start out with the 1st. You have the same offer in to both lien holders, but ideally you want to be able to start out with an approval letter from the 1st showing they are taking a loss.

See if HSBC will assign their position. If you can take it on an assignment, then you can reconvey the lien. Then it would only show the 1st netting proceeds on the HUD at closing.

Geekmom · #3 (**permalink**) 12-18-2007, 07:11 PM

Hello. My client is applying for a short sale for both the first and second mortgages. Heres my question: what if the 2nd does not do a discount and say the first only does a partial discount (not equalling an offer)....just curious. Thanks for your input in advance.

Corey1023 · #4 (**permalink**) 12-18-2007, 08:12 PM

The bottom line is that the first dictates whether the deal will happen or not and under what terms. The 2nd's ability to hold out is in direct relation to the borrowers (seller) ability to contribute cash to the loss. If they cannot do this, then the 2nd can demand all they want, but they will be at the mercy of what the first requires assuming the 1st is taking a loss. If the 1st is getting full payment, then of course the 2nd will have a bit more negotiating power as this would lead one to think that there is some sort of equity position in the property.

So to answer your question, if the 1st is taking a loss and the 2nd wont discount you wont have a transaction...unless you can figure out some method of getting them paid outside closing.

877YouKeep · #5 (**permalink**) 12-18-2007, 10:23 PM

Yes, you can also have the lien released for a better price which will release off the property but stick to the homeowner. This is terrible to do to the homeowner but you can negotiate the lien after the transaction so the homeowner is not harmed in the transaction. the second mortgage will be pretty creative if you have a discussion with them and they still at the end of the day get the money you agree on the 10%

877YouKeep · #6 (**permalink**) 12-18-2007, 10:25 PM

That is actually a slimey approach unless you really have the loan satisfied and not just released at the end of the transaction. It will work but again get the loan satisfied and get everything in writing before agreeing.

Corey1023 · #7 (**permalink**) 12-19-2007, 02:31 AM

Don could you clarify what you just said? What is slimey? I dont understand what specifically you are referring to, like where did the 10% figure come in? I thought all she asked was if you can still short the 1st if the 2nd isnt wanting to play ball...in that context I dont understand your answer.

877YouKeep · #8 (**permalink**) 12-19-2007, 08:50 AM

The original post which I am referring got a discount on the To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily. which is 10% of the UPB, stated in the post. The part that is slimey is releasing a lien and not satisfying a lien. There are companies out there making money and leaving a homeowners holding the bag with a judgment against them.

I was not referring to the question you answered that answer is if they are not accepting then you are dead in the water.