All Forum Posts by: Paul Cordero

I am also very interested to the outcome of this CC,

My company services a portfolio of 2nd liens with BofA. They require 5% of the purchase price minimum for us to even review the SS. Then we have to submit the SS up to Sr. Mgmt (BofA) for a final decision. Nine times out of ten, they request more money on top of the 5% of purchase price. This amount is usually unreasonable for anyone involved in the SS to pay. This usually ends up killing the deal, and the 1st forecloses. Such a waste of time, especially when they take 3-4 weeks to respond to the SS submission.

My theory was that the BofA investors were receiving stimulus money on the loans that were going to FCL. I once told this to an agent over the phone, and I rec'd a nasty email from BofA a couple of days later telling me that this was not true. I am still skeptical though.

What state are you in Chris?

We request a minimum of 10% for short payoffs for our 2nd liens. If this amount is not met (no matter what the first is paying out of their proceeds) we usually hold firm until the FCL sale. Depending on the state, the 2nd may lose everything at the FCL sale for the 1st, but they may retain their right to collect on the balance. If they are in a trustee state or the original 2nd lien was used as purchase money in CA or AZ then the 2nd will be more likely to make the $1.5K work as the the 1st gets closer to the fcl sale date. This is because they know they will get nothing at fcl and will have no right to go after the remaining balance.

In my experience Jr. Mortgage Liens have the most leverage in SS negotiations when the 1st is nowhere near fcl sale. They are going to hold firm to the amount they want until the fcl sale date is confirmed and gets closer.

This is not a good suggestion as there is only 1 agent involved. This must be disclosed to FM, and they will only pay 3%. The negotiator may miss the fact that there is only 1 agent and let the 6% slide (if they suck at their job), but in my experience, they already know that there is only one agent and will only allow the 3%. Submitting a new HUD with your fee as commissions would not fly in my opinion.

Stephen,

The answer to your question is investor specific.

Some other factors that will go into the negotiations are the state's laws regarding deficiencies, the % of the balance recoop'd from the SS, 1st or Jr. lien position., and Mortgage Insurance offsets.

These are the most common factors which play into a decision from our investors.

Some of our investor's require 2 IBPOs (interior), but most only require 1. However, we will order additional IBPOs if the SS is in the review process, or an extension is needed, and our IBPOs are greater than 90 days old.

Our company regularly does drive by inspections for our investors which are more for records keeping than SS review.

MI Companies should not pursue deficiency judgements, they will often ask the debtor to sign an interest free promissory note at the SS closing, or they may ask for a cash contribution at closing. They request either of these, and in some cases both, to offset the MI claim that the investor will be filing once the SS/FCL/DIL is finalized. It is the investor's choice weather or not to proceed with the SS/DIL without meeting the MI Company's terms to offset the claim. This in turn results in a claim less the difference of the amount they tried to offset prior to fcl. We deal with the following MI Companies:
PMI
MGIC
United Guaranty
RMIC
Genworth
Radian
Triad

Still with Green Tree Nick, When and about what would we have chatted?

Hi Everyone,

Just wanted to let you know that my days of servicing REO Portfolios are over for the time being. I just recently made a move to Short Sale Negotiator within my company.

I am in no way a SS expert yet, but I am learning quickly. We service for several large and small investors, so I will help out wherever I can, just in case you need the perspective of someone behind the scenes.

I rarely have the time to answer PMs so hopefully you will see me chiming in on the forum more often. I have been on a hiatus for some time from BP because I am rediculously busy. I will do my best to give good, relevant advice. :mrgreen:

Obtaining a Settlement in Full vs. a lien release only:

All investors are different so I can only speak for the handful that we service for, but typically we will not settle an account in full from a SS unless we are netting at least 30% of our Unpaid balance (can go up from there depending on the case). This excludes the following states:
Washington
Idaho
Oregon
Utah
Nebraska
Montana
New York
Arizona-Purchase money only
California-Purchase money only

In the states above, the investor must settle an account in full upon completion of the SS. There will be no deficiency balance after the SS. However, there will be tax repercussions for the deficiency balance.

YES! I tell all my buyers what we do and they are completely okay with it. I have the knowledge, I build the trust, I find them a deal, they give me their cash, and its a smooth transaction...Honesty is truely the best policy!

We are a servicer for FNMA, so I am trying to figure out how I can put contracts on the inventory we service without creating a conflict of interests.

Thanks for the info.