A Massachusetts Short Sale Property with over 1.2 Million in Property Attachments and Liens on title SOLD!

Swamscott Massachusetts Short Sale

Massachusetts short sale approval

A Short Sale Property with over 1.2 Million in Property Attachments and Liens on title SOLD!

We’ve completed quite a few short sales with list agent Cheryl Dwyer in Massachusetts.  I mean, this sale was initially like any other…well, maybe not.  First, the homeowner immediately set the tone by stating he was not filling out ANY more paperwork because he had already filled it out for his loan modification.  Normally, I would have sent this one packing, but I was dealing with a smaller servicer and was able to get in direct contact with the asset manager.  Keep in mind, if at the onset of your short sale, a homeowner tells you they aren’t filling out paperwork 99% of the time, you won’t have any chance of getting an approval on that sale.  You need homeowner cooperation on paperwork or no short sale.

Next a title pull reveals some news that no short sale negotiator wants to hear.  The property had over 1.2 million dollars in liens and attachments from 2 local banks.  I remember calling Cheryl and saying, “This sale isn’t going to happen,” but never one to back down from a challenge, I figured we better get to work.

The property itself was a non-conforming commercial building, not up to code in the town that it was located in.  It was worth between $105,000-$125,000 roughly and there was over $300,000 owed on the note.  I don’t typically worry about what is owed, just what it’s actually worth and unfortunately, the last hurdle was an impending auction.

Cheryl did an amazing job at marketing and getting the property under contract.  She then was able to do an extremely comprehensive property report which we submitted to the asset manager.

So, we had to break down who was owed what out of the 3rd, 4th, and 5th position lien holders.  What I’ve learned as a negotiator over the years is it doesn’t necessarily matter what position someone is in, if they don’t want to settle for a reasonable amount, you’re out a sale.  What’s a reasonable amount?? Well usually a second position or higher lien holder will settle for 5-10% of the balance, HOWEVER that wasn’t the case in this matter.  My 3rd and 4th position lien holders were the same bank owed over 1.2 million in attachments and liens.  They were excellent to deal with and settled for… are you ready??  They settled for $4000.  I have had credit card executions that were owed $3000, that wouldn’t give up the lien unless they were paid $5000, which was penalties and interest.  Again, small lien holders can make a MASSIVE headache in your short sale negotiation.

So on to the second position lien holder who was only owed about $17,000.  My immediate thought was, this should be easy.   I was wrong of course.  The attorney handling the file was adamant.  They would only settle for 40% of the loan balance.  Well, anyone that does short sales knows this amount could kill the deal right then and there.

Typically, no first position lien holder will allow 40% of a loan balance to a second position lien holder, however, we were dealing with a smaller servicer.  I was dealing with the direct asset manager and he was an EX real estate agent, so I think he could empathize with how hard we were working.

We submitted the deal with the 40% payout and $4000 to the third/fourth position lien holders and IN LESS than 24 hours had approval in hand.  I’m still in awe and thankful we could get it done.  I remember telling Cheryl, there would be no way this deal would fly…and I’m so glad I was wrong.

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