Re: - Posted by Ben (FL)
Posted by Ben (FL) on April 04, 2001 at 15:42:19:
If the foreclosure goes through, and no one bids on the house, the 1st lender takes the house. When they do that, with few exceptions (federal tax liens), all junior liens are extinguished. If there ar ebids on the house in excess of what the first is entitled to get, then whatever is left over goes to the second. For example: The 1st lender is entitled to $65,000, there’s a 2nd for $6,000, and a third for $15,000. The FMV of the house is $120,000. At the auction, if someone bids $69,000, then the first gets $65,000, the second gets $4,000, and the third gets nothing.
If the 1st lender accepts your short sale offer, you still have to get the 2nd and 3rd to release their liens. I had to spend 10 minutes, once, explaining to a branch manager of Citifinancial that if they didn’t settle with me, and no one paid more than the balance of the first at the auction, then they would get nothing. Hard to believe that she didn’t know how that worked, huh?
You have to remind them that they wil lget nothing if the foreclosure goes through. If there’s a ton of equity, then it may be in the best interests of the second or third lender to go ahead and buy the house at the auction. So you need to downplay the value of the house and the likliehood that anyone will buy it at the auction. They most likely will not send an appraiser out to the house.
You said no one at the third will talk to you. Either they do not know there’s a f-closure going on (with Citigroup buying everyone up, mergers cause plenty of confusion) and so feel no need to talk to you, or they are just slam busy. Get copies of the Lis Pendens from the courthouse and fax it to them to buttress you case.