"My company works with short sales. Many lenders are instructing appraisers not to use absentee owner properties and REO's as comparables even if they are an exact match in an area where the market is driven by foreclosures and short sales. Foreclosure Radar help correct this deceptive practice...
- Joe Vera, CA
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E-trades requires 10% of the loan amount., I just got approvel from the 1st lien holder which is LItton Loan Services and E-trade is the 2nd, both approved. Make sure that you ask you're negotiatorto post pond the trustee sale. If you're in the process of negotiation a short sale they well post pond.
Thanks so much for sharing the information. Makes me feel like we have a chance!
I too am dealing with an e-trade second. Here is my experience. The first which is Wells Fargo agreed to short sale and will credit second(e-trade) $3000 to release and allow sale. The total balance owed on second is $35000. The first which is owed $581000 agreed to sell for total net of $395,000 almost a $200000 loss. E-trade's response "We want a minimum 30% of principal and have the seller agree to a unsecured deficiency note for the rest." So a company who gets nothing when the 1st forecloses wont release with out full reimbursement, and we wonder why America's Banking system almost collapsed.
thanks for your post Simon and Gino. Luckily after 3 months we still have a buyer willing to buy the house. The first agreed to give Etrade 10% and of course they wanted 30% so now I'm waiting to hear. The one thing I will say about Etrade is they get back to me right away- now if they will just agree, then they can have a little bit of something in their pocket, otherwise, this deal is going to die and they will get nothing. Strange that when looking at "the books" something isn't better than nothing....I'll keep you posted and thanks again for giving me hope:)
Now etrade says" Short sale for a net recovery of 10.1% in the amount of $7,000 is rejected. E*Trade will counter offer to a net recovery of 14.5% in the amount of $10,000. E*Trade will agree to release the lien from the property for a short sale in the amount of $10,000 but will not agree to release the Borrower from the deficiency balance. "
I'm hoping to still make this happen. Any suggestions out there? The first bank will not budge on giving the second more than $7k.
Has anyone heard of the second not agreeing to release the borrower from the deficiency balnace?
Elisa - any chance the eTrade 2nd was a purchase money loan? If that is the case then it can help to remind them that they have zero right to recover a deficiency in CA anyway.
I've had the same thing happen with etrade. They had the First on a short sale in which i represented the buyers. In the short sale acceptance they stated they would allow the short sale to proceed and release the lien on the property but declined to accept the minimum net proceeds in full satisfaction of the amount due under the loan. After consulting two RE attorneys the decision was to foreclose on the property. We tried to have the language changed in the short sale acceptance time an again to no avail. 7 months of hard work a distraught buyer and not to mention seller! Be very carful taking Short sales where etrade is the lender.. Gd luck
Unfortunately he rented the house and I think the zero right to recover a deficiency in CA if only if the house was owner occupied. RIght?
If it wasn't purchase money then the one action rule exists. The second may have been wiped off of the title to the property through trustee sale but they have up to 4 years to seek a judgement from the homeowner. This would then be their "one action".
They will usually sell off this paper to a recovery or collection agency for pennies on the dollar. These folks can be VERY difficult to deal with.
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
So does this mean etrade did agree to release the Borrower from the deficiency balance?
Etrade said in the approval the note holder reserves the right provided in the note will remain enforcable if allowable by law, including but not limited to the collection of any deficiency balances.
My client did his due diligence and after a few days gave me the o.k. to continue and close the deal.
I guess you never know what a client is going to decide.
Our loan is with PNC/National City as the servicer but ETrade as the investor. HELOC 2nd (non purchase money recourse loan in California) with a balance of $350K.
We are having a hell of a time. Six months ago, they agreed to a lien release if we got them 40% or a full release if we got them 60%. At the time we had perfect credit and some money in the bank and an offer on the table. That buyer walked.
After the buyers walked we requested that the bank approve a slightly lower short sale since, in the high end market, an unapproved short sale sells way low. They would not.
Now six months down the road we have been late the last 3 months (30 days) and have no money in the bank (husband unemployed). We finally got another offer that nets them $38K. Furthermore, their BPO is now $200K less AND less than our first so they would net nothing in a foreclosure sale.
We just got the answer back and they said their offer remains the same as six months ago i.e. $215K for settled in full or $150K for a lien release.
Since our loan balance is $350K, I'm assuming they think we will make up the difference of $175K or that the buyer might be willing to pay as much as $350K more than their BPO.
Are they crazy? They are allowing us no alternative but to let the house go into foreclosure. We asked them to come back with something more reasonable as that settlement was based on a different market and a different financial picture and they said they would not. I asked to speak with Etrade directly and PNC said I could not.
We are beyond frustrated in large part because we could have had the house sold for only a minor loss a year ago but that would have required a short sale negotiation and those buyers were not interested in the short sale process. So our offers are low because of the short sale process yet the bank wants us to make up the huge shortfall that they caused.
Wow. Your story is definitely why buyers do not always decide to wait...short sales are risky for the buyers and the sellers. I wonder if it has to do wtih Etrade being the investor with National CIty holding the note.
Wow. Your story is definitely why buyers do not always decide to wait...short sales are risky for the buyers and the sellers. I wonder if it has to do wtih Etrade being the investor with National CIty holding the note.
I have Etrade as 2nd and they have agreed to 10% which is only $900 more than BofA will allow them. We can work around that. Just have to get the sellers to agree to the Etrade note which says they can go after the deficiency which is about $50k. This is a Heloc in CT so I assume that by law they can go after the deficiency?
It seems these banks area always leaving it open and it's a standard clause in a contract. The seller can call the bank direct and try and negotiate the 50K out of the deal or 10 cents on the dollar, etc. Of course, we're not tax professionals so he should speak to a tax advisor if he's not sure what he wants to agree to. Good luck!
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