Short sales have been around now for the last few years and supposedly the lenders have been getting better at them. In fact there has even been a lot of publicity that many of the lenders have become more responsive and helpful to the home owners that have fallen on hard times. To help them through the short sale process. Many of our law makers have insisted that they become more responsive as well. But is that not usually the case.
Our office has been working on a short sale on a property for the past year now, literally the past year. A whole year has gone by where Green Tree is the second on this property and has consistently prevented this short sale from happening. To the point that the first is now threatening to just pursue the foreclosure process. This property happens to be located on 1676 Maple Ave, Unit 7, Solvang, Ca. 93436. Now remember this lender has not received a payment for over a year now. The balance happens to be 58k on the second and 248k on the first. On a property selling for 120k
Now the client did cash out like so many other people so this is not a purchase money loan. Meaning that he did not use the loan to purchase this property he took money of the property for it. But like many others he fell on hard times and has not been able to pay the loan and now does not even live in the property but a renter.
What Green Tree is willing and wanting to do is let the home go to foreclosure, they will get nothing the first will close them out. Then take the client to court suing the client forcing them into bankruptcy. Rather than just take something now vs. nothing, because the first lender is only allowing them 6k out of the transaction which is customary in all of these transactions. Even if roles were reversed Green Tree would be doing the same thing to the second, you are only allowed 6k take it or leave it. Now Green Tree is willing to settle for a higher dollar amount to close off this transaction for about 12k but they know the first will not allow that. Why would they if there is any extra money it should go to the first. The same rules that Green Tree would enforce on any other lender if they were in first place are the same rules they want broken.
Reality is rather than settling for something Green Tree would rather let this property go to foreclosure, and literally get nothing. But they would reserve the right to sue the client and take him to court and force him into bankruptcy. I guess getting absolutely nothing and ruining someone else credit and putting another foreclosure on the market is a better alternative.
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