Tuesday, September 20, 2011

My Real Estate Agent Says to Take The Deficiency


Negotiating Short Sales 
Are you trying to short sale your Destin Florida home, but have multiple mortgages?  Then you'll be interested in reading the following question I received from a homeowner:
 
"We have short sale approval letters from both Wells Fargo and a HELOC with Wells Fargo.  I am happy with the primary letter, but my question is regarding the HELOC approval letter.  In a nutshell it asks for me to agree to pay 100% back and they still have rights to sue for deficiency judgment. 
 
My current real estate agent says that's just normal wording affirming original loan terms and that I would negotiate with the HELOC after closing for a reduced amount.  She says we can't negotiate with the second as any money I would offer, would then have to go to the primary."

My answer:  There is no reason not to negotiate with the HELOC and get the deficiency waived.  The senior Wells Fargo lien may allow you to pay the Wells Fargo HELOC at closing.  I've accomplished that with prior short sales.  Although it is true that some investors don't allow seller funds to the junior at closing, that's not always the case.  Why not try now, rather than be left hanging with a future potentialdeficiency judgment? She told me her attorney agreed.

What are some methods of disposing the junior lien?  Settle with them now regardless of whether you are closing, since you have funds to contribute.  You don't have to sell your property to settle a HELOC or any lien. I've had several of my Destin Florida area sellers do just that.  Why? It makes it easier to deal with the senior lien at time of sale.  They won't have to take some of their net proceeds to pay the junior.  Also, collection and foreclosure efforts from the junior will stop if you settle with them.  Isn't that what you want anyway?

It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

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