Need advice on a short sale where the 2nd cancelled the request, charged off?

Question

Minna Reid · Answer

Tom is correct - that lien is out there owned by someone. You need to find that someone and negotiate payment for the lien release. If the numbers are tight, you will need to short the first as well to get some payment to the second.

Tom Gimer · Answer

The lien needs to be paid and/or released. A third party likely purchased that debt from the original lender (uncollectible by typical debt collector standards) for pennies on the dollar. And that lien is a huge title problem waiting to happen for anybody who thinks it disappeared when an accounting decision was made.

It's a tough situation for the borrower. Track down the new owner of the debt to complete the short sale and wake a sleeping creditor who doesn't need to play ball; or ignore it somehow (bad title company) and the new parties in interest get foreclosed from first lien position by somebody just waiting for the opportunity to squeeze everyone.

Cliff Durrett · Answer

Thanks Tom, buying at the FC auction isnt an option

The first is only slightly more than the 2nd and it will be bid way over that amount.

Trying to help the lady get something via a SS

Tom Gimer · Answer

@Cliff Durrett Just buy at the auction. It’s currently a mess but the f/c will clean it up.

Fannie apparently can’t release the lien now but it can be extinguished as a matter of law through the foreclosure.

Cliff Durrett · Answer

its in Florida

Fannie still owns it, at lease according to Mr Cooper

They have been horrible (Cooper) on this loan. Was doing a short on it before and they gave payoffs of double the amount owed, cancelled the mtg once, reinstated it 6 mos later, and showed on her statement that the "lender paid expenses" in one year were $999k! Then they said she had $300k in escrow, so sent her $10k?, then cancelled the check (she didnt deposit it anyway, knew better). And thats not all.

So the first is in FC, sale in 60 days. Trying to get the 2nd some money, but they say no, its been charged off. Maybe they used the $999k as the charge off amount and dont want to bring the acct back into the light?

Really strange. Also, just had a law firm file a notice of appearance on Fannie/Coopers behalf, but they filed no response.

Thoughts anyone?

Chris Seveney · Answer

@Cliff Durrett

What state is the property in. In some states the 2nd may be uncollectible as it’s past statute of limitations

Regarding charge off, that has little impact on borrower - the lender is writing it off I. Their books but borrower could still be responsible. Google zombie mortgages.

Note if a loan is charged off the loan can no longer accrue interest unless the lender starts issuing statements again

Need advice on a short sale where the 2nd cancelled the request, charged off?

Need advice on a short sale where the 2nd cancelled the request, charged off?

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