Trying to close a short sale and haveing a problem...HELPPPP!!!!
The property has a first and a second mortgage. The first agreed to short sale and the second holder has agreed on a price too.
The Purchase and sales agreement must show EXACTLY what I'm paying for the property which is the exact amount due to the first, and the Hud1 must show no one but the first is getting anything.
I dont want to just write a check to the holder of the second in the event that the people I am selling to fall through and the deal is dead.
The title co wants the 2nd cleared up before they will close.
So how do I settle the 2nd without simply writting a check and putting my funds at risk?
Thanks
Keith
Why "the Hud1 must show no one but the first is getting anything"?
I'm no expert but it seems like the owner of the first should only care that the home-owner is not getting anything. In either case I understand that the hud1 you fill out for the first is really just a negotiating hud1 and not what you actually use at closing.
This is all just theory I have learned, hopefully ShortSalePro will chime in here....
You've first got to qualify the deal as having potential for a short sale. Not every scenario has that potential. A short sale strategy is but one tool a real estate speculator needs to know.
If the first mortgagee is accepting less than it is due, it won't want any juniors to realize any proceeds from sale.
To close this deal, it will be necessary to have all 2nd mortgage "Purchase via an Assignment" documents in place, and assure the title company that this deal will close. Draft a Certified check made payable to both the 2nd mortgagee, and yourself. Include a copy of that Check with the "Purchase via Assignment" documents in what you provide to the Title Agency. If the deal implodes, simply deposit the certified check into your own account with the endorsement, "not used for intended purpose" on the check.
Provide an assurance to the title agency that you'll pay their costs in the event that
the deal blows up. That may influence their decision to proceed with the short sale closing.
Where do I get the "Purchase via Assignment" documents ?
I have the short sale already...... they of course, do not want the 2nd deed of trust to recieve any money
I gotta get that lien removed - the 2nd will accept $2000 for their $7000 loan... but what documents do I get him to sign so that he will A. shw he will accept the $ after closing, not before with the understnading... I pay him nothing if the deal does not close, and B. a document I can take to file that shows it is released NOW so I don't have to give him any money at closing.... because I have to go to the closing with NO 2nd mortgages.. the 1st (that is doing the short sale) won't allow it... or ... deals off thanks