Yikes. Talk about live and learn. I learned a new and painful lesson in my short sale education today that I thought I would share.
After finally being approved for a short sale (conventional loan with Wells Fargo), the loss mitigator sent me an email stating that the mortgage insurance company wanted a cash contribution from the seller of $1500 or a promissory note of $6000 paid out over 120 months at 0% or they would foreclose immediately on the seller.
Yep. The LM was kind enough to call me and explain the situation to me even after I sent a professional, but terse, email.
This client’s loan was a freddie/fannie product and the MI company was taking the majority of the hit for the loss so this was the way it was. The LM told me that he had seen a couple of promissory notes for upwards of 40K and that some MI companies would only take a 3K loss on a second.
Gee, this would have been nice to know when I took the listing so that I could prepare my client should this come up.
So, now you know what I know.