2nd mortgage

[Sue Wolfe]

I live here in Az Nw corner of Phoenix and we just moved here from Co Springs sold our house in 28 days after 38 showings, anyway we found a house and Wells Fargo Approval Demand Letter last Friday and selected a “drop dead date†of June 10. What we are waiting for is for the final approval on the owner’s 2nd mortgage and a signature, is this signature important and can we still close? We are so excited and anxious to get into this house my husband daughter and i! so wonder if we dont get a signature, what happens? Do they normally just write it off (the 2nd loan company not sure who it is with, we are guessing he got the loan after he moved into the house to get a pool but again we arent sure! If anyone could please answer this !
Thank You

[Jon Holdman]

Sue,
Until all the lien holders approve the sale you DO NOT have a valid contract. The second lienholder is going to want something, or they will not approve the sale. That might seem unfair, if they have a lien that's worth very little. But that is their right.

If the net amount from your offer (your offer price less the comissions and other costs, this will be about 90% of your offer) is less than the amount owed to Wells Fargo, then you would think the second is worthless, and they would just sign off. They will not. They will want some amount of money, even if its only $3000 or some such. Wells may be willing to give them a little, maybe $1000 or $1500. Stories others have told here are that amounts this small can end up causing the deal to fail.

Ideally, you should speak directly with the short sale negotiator. That might be the listing agent, or could be someone else. If you can find out from that person exactly what's happening, you may discover there is only a small amount keeping this deal from happening. Let the negotiator know that you are willing to kick in $2000 or whatever is needed to make the second happy.

If you can find out the amounts involved, post here and maybe we can help you push this deal through. The key amounts are:
1) What's your offer amount
2) What's owed to Wells
3) What's owed to the second
4) What is Wells offering the second

How can this foreclose? Easy. The deal drags out past 6/10, Wells cancels their approval and takes the property to sale. It happens every day. It happened to me on a property I tried to buy last year. Right up until the day before the sale the listing agent kept saying we had a deal. We didn't. It went to foreclosure and sold for $62K vs. my standing offer of $67K.