Short Sale Standoffs: How to Avoid Getting Hit

There are two scenarios in which a short sale negotiator might find him or herself in a “short sale standoff”: when you are processing a sale with more than one lien holder and neither will agree to the terms offered by the other, or each one will only move ahead in the short sale process after they see the short sale approval letter from the other lien holder. If you are in the middle of one of these frustrating scenarios, this article offers some ideas for how to get out of it. Return to the first lien holder and ask them if they are willing to give the second lien holder more money. Next, go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will acquiesce. If this does not work, find out why — is the loan issued by Fannie Mae or Freddie Mac, for instance? If so, they have a maximum that they allow the second. And, when told about the situation, the second lien holder may be more willing to agree. The worst case scenario is that someone pays the difference. Regardless of who pays whom, make sure that this contribution is disclosed to all parties and shows up on the short sale settlement statement at closing. | Read More