Short/Discount 2nd, Take 1st Subject To
Can anyone document the best way to go about shorting or discounting the 2nd mortgage (a HELOC) and then taking the 1st "Subject To"?
1) Makeup and submit a "short sale" package? (Purchase and Sale Agreement would have to show the 1st being taken SubTo)
or
2) Fax an authorization to release to the 2nd, call them, and negotiate a discount over the phone then take the 1st Subject To (simulataneous closing)?
or any other ideas? complications/roadblocks to watch out for?
Foreclosure is 1st Tuesday of March.
TYIA,
-JohnCl
The numbers:
1st (Chase): 201K
2nd (Chevy Chase): 29.5K (out of 30K HELOC)
ARV 280K
REPAIRS 5K
-JohnCl
SSP,
Thanks for the quick response.
I am ok with discounting the 2nd with cash.
What do you mean by "via an assignment"?
-JohnCl
Upon payment, the existing mortgagee would assign the mortgage to you. As mortgagee, you would then record the assignment documents in the appropriate recording office.
You could use a hard money lender (or private money) for the cash to pay off the 2nd and back payments to the 1st. You would file a satisfaction of mortgage on the newly-purchased 2nd (releasing it) and then give your private lender a 2nd position (making it a safe loan for him).
[addsig]
The only way to find out is to try it and see what they say. I always try to make every deal a zero cash deal, so that was just my take on how to do this with no cash outlay.
[addsig]
Got it. It is borrowed money, just not hard.
-JohnCl