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    murphyteam's Avatar
    murphyteam Posts: 6, Reputation: 1
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    #1

    Feb 20, 2010, 06:30 AM
    Why would bank ask for more than owed in short sale
    A realtor involved in a short sale with first and second mortgages. The first mortgage is $xxx,xxx and the offer is $xxx,xxx PLUS $86,000. The first mortgage holder demands we prepare the HUD-1 indicating $3,000 to the 2nd mortgage holder and entering $xxx,xxx PLUS $68,000 to the first mortgage holder. The first mortgage holder further instructed that I must negotiate with 2nd mortgage, liens, condo association (all of which are owed arounf $20,000). Question is: What the heck will the first mortgage holder do with the extra $68,000??
    LisaB4657's Avatar
    LisaB4657 Posts: 3,662, Reputation: 534
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    #2

    Feb 20, 2010, 06:36 AM
    Wait a second... is the purchase price going to cover the full amount owed on the first mortgage? If so then it's not a short sale and the first lender has no right to make any demands.
    murphyteam's Avatar
    murphyteam Posts: 6, Reputation: 1
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    #3

    Feb 20, 2010, 06:41 AM

    So I will need to pay them (1st mtg) the full amount they are owed and deal with the 2nd mortgage holder, who will be short?
    LisaB4657's Avatar
    LisaB4657 Posts: 3,662, Reputation: 534
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    #4

    Feb 20, 2010, 06:47 AM
    As long as the purchase price will cover the first mortgage, yes. It will be a short sale only as to the second lender, not the first.
    murphyteam's Avatar
    murphyteam Posts: 6, Reputation: 1
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    #5

    Feb 20, 2010, 06:55 AM

    Thanks, I appreciate the help
    LisaB4657's Avatar
    LisaB4657 Posts: 3,662, Reputation: 534
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    #6

    Feb 20, 2010, 06:59 AM
    My pleasure. Good luck!
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