As a short sale negotiating company, we work exclusively with agents that have a high level of integrity and who want to ensure the that their sellers have their properties sold with no, or the least amount of negative ramifications. We feel very passionate about getting short sales negotiated in a way that every effort is made to get lenders to approve a settlement in full Vs a release of lien.

In Minnesota, under foreclosure by advertisement (the vast majority of foreclosures being done in Minnesota are by advertisement and are non judicial foreclosures) The lien holder who actually took it to sale waives their right to a deficiency judgment (see Minn. Stat 582.30 ) .

Traditionally the first position mortgage is the one that takes the property to sheriff sale and, under foreclosure by advertisement, therefore waive their right to a deficiency judgment and cannot go after the sellers for the difference between what they have accepted as a short sale and what they where originally owed. In the situation that a property has not gone to sale there is a considerable amount of possible future risk for a larger deficiency.

In a short sale situation the first position mortgage will dictate how much a Jr. lien holder can get as a payment for a release of lien. This payment is usually a very small amount ranging from $1,000 to $5,000 regardless of the amount due on a second mortgage. The Jr. lien holders will usually accept this amount as a release of lien , this allows their lien to be removed form the property but does not release the sellers from their obligations and terms of their promissory note that they signed when their gave the bank a mortgage. We are seeing more and more lien holders go after the homeowners and proceed to wage garnishments; I believe that this will continue to be a big problem for sellers and will engender some liability for the agents and brokers who have failed to disclose this.

The obvious solution to dealing with this is to negotiate with the second position mortgage and offer more money for a full satisfaction of mortgage and ensure that the lien holder cannot go after the sellers for a deficiency later. The question is where does the money come from? There are 4 different sources that this money can come from:

The Seller:

The seller could feasibly come up with the money and figure out a way to allocate these funds either on the HUD-1 (and hope the first mortgage will allow this to happen) or outside of closing. Either solution is not very likely as the sellers are in financial distress and probably need as much money as possible to move to their new home or apartment.

The Buyer:

The buyer could decide an choose to provide additional funds to the Jr. lien holder. The funds would have to come from the buyers’ side of the HUD-1 and would be over and above what the purchase price of the property is; the major problem with this source of additional funds is that it would be highly unlikely that this additional amount could be financeable.

The Selling Broker:

The brokers could choose to give up most or all of the commission proceeds to the Jr. lien holders. This is obviously not very palatable to agents who are about to get a house sold with all of the additional work that a short sale involves.

The fourth source of additional funds could come from a buyer that is willing to purchase the property and immediately resell it for a profit. The additional funds needed to satisfy the Jr. lien holder can come from the profit that an investor makes. As a principle of a short sale negotiating company and an investment firm, we have done this numerous times; to the tune of over $350,000 so far early this year. These funds have helped dozens of sellers get satisfactions of mortgages and pay a whole host of other expenses such as : back taxes, HOA fees, rental escrows, water bills and any other unforeseen expense that can pop up at the last minute.

Our company provides a solution to real estate agents to outsource their short sale negotiating and provide an immediate offer to the bank. Because the investor offer is low the bank rarely approves it but it has initiated the process that needs to get done with the lenders for them to consider future offers. Once a future offer comes in we will be in a situation with the lender that we will be able to get a much faster turn around time to then get the deal approved.

To some, this process may seem controversial. I assure you that all that we do is 100% above board and everyone is completely disclosed to. We are proud of what we do and how we conduct our business. We have never had any complaints against us and always do what is best for our sellers. The fact that we have allocated so much money to satisfy mortgages is a testament to our intent. We are not aware of anyone else in the US who are doing short sales in this matter.

http://sg.video.yahoo.com/watch/4529948/12134673

Best Regards,

Short Sale Assistance Group LLC
Ascendant Realty LLC
http://www.ascdnt.com
9001 E. Bloomington FWY, Suite 117
Bloomington, MN 55420
T: 952-888-7545

www.wecallyourbank.com

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