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Short Sale-Bank asking for note

We are trying to do a short sale. We have 190k left on the mortgage. We accepted on offer of 174k. The bank has countered with $3000 cash and a 37k note. The note seems super high, where are they getting this number from?  It seems to me they just don't want to get a deal done, or is this a reasonable offer?
  • November 14 2012 - Minneapolis
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Answers (10)

Remember, it's all a negotiation.  The bank can ask for whatever they want and they often do just that because some Sellers will agree.

They are basically countering back with numbers that cover the mortgage and their costs, or at least comes pretty close to it.

A lot depends on your hardship, your income, your assets and your exact situation.  You do not have to agree to the note or the $3,000, but then they don't have to agree to do the short sale either.

You should speak with your Agent and come up with a strategy to try to negotiate that down. 
  • November 30 2012
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your high credit score may be the reason for the lenders requirement

  • November 14 2012
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 If we offered more cash can we get the note lower?  Could 10k cash omit the note?

YES YOU CAN, $10,000 CASH WILL OMIT THE NOTE. THE COLLECTION RATE ON THE $30,000 NOTE IS 20% OR $6,000 PLUS $3,000 AND YOU OFFER $10,000 IS SATISFACTORY.

INVESTOR IN THE MORTGAGE WILL ACCEPT.
  • November 14 2012
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No. No. No. 
Never and Ever under any circumstances sign any promissory note or give cash to the bank upon short-sale. 
Never.

The bank these days are giving cash as "Cash for Key" to the OWNER in the amount of $3,000 to $10,000 to move out on short-sales on some approvals from the banks. I have done more than $10 millions in short sales buying and selling already and...... YES SOME OF THE BANK TOOK TARP MONEY AND THE SAME BANK IS ASKING YOU TO PAY UP. Double ending on the tax payers (you and me), you know what I mean.
This is the fault of YOUR "stupid agent" who can not negotiate crap and is total incompetent in short sales. YES, i came across some banks playing short-sale language games such as "release of lien" instead of "release of liability and full satisfaction of debt (no need to pay)" or "No Waiver of Deficiency" (you have to pay the remaining balance after a short-sale). Those are just rediculous and should not be like this and even asking for cash and note? It should be the other way around. 
Do Not do it Mr. User1694790. Don't sign for it, just tell the agent 
"you either get me off the $3,000 cash and the note or else I wont sign anything or close". 
Life is hard and short sale is a hard business and your life is EASY? If your life is an EASY STREET then just go ahead and sign and pay the bank since you don't care anyway. If not, you got to bite the bullet and "just say NO" TO YOUR AGENT. Because in the end, "Bank got their money, Agent got his or her commission (in Christmas) and the buyer got the cheap house (yeah thanks to you) from you and you ending paying for everyone and then some. If this deal sounds good and you live on easy street then I advise you to do it, for real. Or let it foreclose and stayed for another 3 months for free. You will be able to get another house in 3 yrs...i promised. 
Sincerely,



F. Liu,
a former bank Vice-president

P.S. On the other hand, just have the buyer add $13,000 to the original offer the bank WILL accept without you paying $3,000 plus $30,000 note. IF THE BUYER wants the PROPERTY for real. $13000 on a mortgage of 30 yrs at 3.5% is mmm...let me see $58.38 per month increase in mortgage. Its time you tell the AGENT what to do NOT the other way around. Don't let the agent PUSH you around. Don't like what you see, don't close!
  • November 14 2012
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You need to have the discussion of the specifics and negotiate with the lender.  
  • November 14 2012
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The lender required us to be delinquent on our loan for 30 days min.  We are only delinquent by 1 payment or 30 days.  There is not a second loan and no other cost involved, besides closing cost.  If we offered more cash can we get the note lower?  Could 10k cash omit the note?
  • November 14 2012
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Counter the bank with a number you can live with.
  • November 14 2012
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Profile picture for wetdawgs
You will need to discuss with your lender the specifics of the numbers.  Basically what they are telling you is that you aren't qualified for a short sale where they "forgive" the debt. 

For example, using some rough numbers if the sales price is $174k, and agent commission is ($10,000), the lender net would $164,000.  This would justify a deficiency of $26,000.    Have you missed payments?   Have a  second loan?   Are there other costs involved such as buyer's assistance?

  • November 14 2012
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I understand that, I am just questioning why the bank/lender is asking for a contribution from myself that is way higher than the deficiency mortgage, or buyer price vs what is left on the mortgage.  Thoughts?
  • November 14 2012
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banks do not have to accept a short sale offer. You made a deal with a lender and signed the papers. The bank is not defaulting, you are  and the bank does not have to allow it. This is what makes a short sale so frustrating. Many buyers do not understand that just because you, the seller, accepts an offer that does not mean the bank will too.

Tim
  • November 14 2012
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