Short Sale almost complete

[moving09]

I apologize if this is a repeat. I thought I submitted this but can't find it.

I have a first and a second loan on my house in CA. Both are purchase money loans, no refi or heloc. I have been through the preliminary approval process with both lenders for a short sale. The first has approved the hud1 and I am awaiting the second.

When I originally was approved for these loans they were in my name only but at contact signing there was a clause that required my spouses signature even though her name was not on the loan contract. We went ahead and did this. She is on the title. I have seen a letter from the first lender that I am to sign releasing me from the obligation of the first loan but it does not have my wife's name on it and further it says only I am to sign it. I suspect the second will be similar. Does her name need to be on documentation to protect her from further obligation?

Thanks for your time.

[Enough Already]

Moving09,

This is tricky stuff. The best thing to do would be to talk to a local real estate attorney. Don't sigh anything until you're sure they're letting you off the hook, completely.

Good luck.

[faith]

Originally Posted by Enough Already

Moving09,

This is tricky stuff. The best thing to do would be to talk to a local real estate attorney. Don't sigh anything until you're sure they're letting you off the hook, completely.

Good luck.

Moving09,
Enough Already is right. You have to be careful, there's a lot of scam out there. You need to ask a lot of questions before signing the loan documents. If you don't understand it, don't sign it, if there's a force or a rush for you to sign it, do not sign it. All these are indications of scam.

In a Short Sale process, your lender will assign a Negotiator and ask you to have your agent submit a Short Sale package. Your agent in return will submit a HUD1, listing price, contract, your authorization to have your agent to talk to the lender and the buyer's offer. The Negotiator will request a BPO(Broker's Price Opinion) to find out the fair market value of your home.

You can find the recent sold homes in your area by checking www.zillow.com and put your address and you can see the current selling prices and the recent sold homes. Your lender will approve your buyer's offer if the offer is within 85% to 90% of the fair market value. The Negotiator will ask the investor to accept the offer if the buyer's offer is acceptable. However, the PMI(Private Mortgage Insurance) wants you to sign a promissory note to pay the 2nd mortgage or whatever the balance owed. Do not sign that note unless you understand the terms on it. You can always negotiate the balance owed by making an offer to pay 5%, 10% up to 20% of the balance owed, payable in 10 to 30 years and no interest. Make sure you read the fine prints and you can always deny the terms they have offered you if you are uncomfortable with it.

You have a purchased money mortgage and never refinanced so you are protected by CA Section 580b and you need to tell your negotiator that you know CA Section 580b that they can not pursue you for any deficiency judgment. You need to negotiate or ask the lender or the negotiator that they need to put in writing that they will not pursue any deficiency judgment against you and your wife for the 1st and the 2nd. This is the time for you to negotiate the Short Sale and demand a letter for the 1st and the 2nd that states that the Short Sale satisfies in less than full balance the obligations you have with the lender and the PMI for both you and your wife. They might trick you of saying to sign this first and we will let you sign the 2nd later, but Short Sale does not work that way. The first and 2nd are negotiated both at the same time. That's why before signing you have already negotiated it, demand a letter to say that they will not pursue any deficiency judgment against you. If they said, no then you can do a scare tactic, let it foreclose and we will file for bankruptcy. The lender does not want to spend a lot of money in foreclosure. Now is the time for negotiation not later.

I think it's better to pay a little money and ask a Real Estate Lawyer in your area to check the documents you are signing. Ask them for a flat fee or how much they will charge you for just checking the terminologies this lender put in the documents.

The link below might help you regarding Short Sale

National City Short Sale Help

http://www.loansafe.org/forum/short-sale-outpost/


The information given is not a legal advice but for your information only.

God bless and take care.