TD Banknorth Won't Discount 2nd

[Matt Kearney]

I am working on a short sale right now that is getting very frustrating. The first lien holder has agreed to a price of $32,000, on a balance due of $90,000.

TD Banknorth holds a $13,000 2nd and will not take anything less than full payoff?? There arguement is that the tax assessed value of the house is $125,000 and they think the first is selling for too little.

We sent over the appraisal the first did on the property that came in at $35,000.... and they still won't budge.

My negotiator said they have worked on many 2nd's with TD Banknorth and they usually settle for $1,000. I don't understand what is up with these guys??

Now the first is pushing is to close over the next week and we can't get anywhere with these fools at TD Bank, don't they realize if the house goes to auction they will get nothing!!!

Any advice or similiar experiences?

[Scott Hubbard]

Sometimes the 2nd will take a hardline approach despite the fact they would "at least get something".

I assume you have tried to raise your payoff amount to the 2nd? Is the second a HELOC and do they have deficiency rights?

Sometimes the lender will look at the deal to see if there is any recourse. If there is recourse after default, then the second might want to pursue a default judgment.

If there is no recourse, then the decision to not settle may be one of either misinformation or pure spite.

In the case of being misinformed, you can try and escalate this matter within the 2nd's management, or u might increase the offer.

You can also offer to purchase the note, though this will likley cost you much more and will depend on the right numbers.

It sounds like, misinformation to me since they are using tax value to determine market value which we all know is a poor determinant. It also could be spite and they could be using the tax valuation as an excuse.... In this case you will need to try purchasing the note or walk away. Once the negotiator or the investor has its mind made up, it is nearly impossible to convince them otherwise. At the very least, your going to have to get very creative!!