FHA Preforeclosure And 2nd
Do any of you know if this is a true statement? "If you short sale the 1st which is FHA , you can offer the 2nd no more than $1000." If that is true, does anyone know a "law" I could quote to the 2nd to urge them to work with me? Sale is due Feb 3, and the 2nd didn't even know it was in foreclosure till I informed them. 1st is with Bank of America and 2nd is with Countrywide.
Thanks for your help.
I have heard the same thing about FHA short sales.
Are you sure the 2nd didn't know the 1st was foreclosing? By law all junior lien holders have to be notified when the 1st position lienholder begins the foreclosure process.
Anyway, if you've been in good contact with the seller then he or she should have received a letter from the 1st mortgage company notifying them of the foreclosure proceedings. You might want to fax a copy of that to the 2nd mortgage company as proof that the house is being foreclosed on. That might light a fire under their a*s!
FHA short sale criteria limits junior payouts to $1,000 (might have been increased to $1,500)
To circumvent this, you can offer to purchase the second via an assignment... at whatever price you feel is appropriate... and affordable to your deal.
Then, with YOU as junior mortgagee, you can agree to accept $1,000 from proceeds with an FHA short.
SSP
The assignement of the junior Mtg with a FHA 1st mtg is a great idea!!! I never thought of that as a work around of the $1000 dicturm. For a long time I've just turned up my nose when the property was encumbered by FHA. I'll have to give them a second look.
MSPeach
Countrywide is a good mortgage company. They're just so big that sometimes one dept. doesn't know what the other dept. is doing.
I once wanted to do an assignment of a second held by them- (conv 1st mtg). They knew that it was going to sale. I continually called them for a decision. Finally, I bought the property at the foreclosure auction.
About 2 months after the sale, I got a call from a guy at Countrywide who wanted to, "discuss my offer". I told him that I bought the property at the auction. There was a pause, then, "I'll check into that., If what you say is so, I'll close the file". I didn't thank him for his "expeditious handling of this urgent matter." . The positive was that I paid less at the auction for the property. The negative was that it was an all cash tranxaction.