Seller put brother's loan in his name...now what?

I have a seller that owns two homes with equity and is retired and of course has some retirement funds to live on. His brother had bad credit, so several years ago my client helped the brother by getting a loan for 3rd house on behalf of the brother and the brother moved in and assumed all financial responsibility of said house.

Of course Title and the Note is in my client's name, not his brother's. All has been well until recently with the upcoming "Note re-set" which will cause the house to be in the negative by $1200 a month and there is negative equity of $100K or so.

There is one Note, EMC, it was refi'd and is a recourse loan. EMC will not respond to inquiries for a loan mod. I have told my client that since it is not his primary residence and he doesn't really have a hardship EMC is just going to continue to ignore him. Plus there have been no missed payments to date.

Is there any hope on this one for a Short Sale? Can I document with EMC that the brother was really paying on this house and show the hardship the brother has? Yes they will want to see my client's financials too... but I wonder if EMC would look at the hardship of the person who has been paying on the Note since its inception?

Thoughts? Could use your input.

He will have to initiate the ss and include his brothers info in his hard ship letter (Although I doubt theyre going to care...because his brother cant be held to a personal lien, but your seller can.......they may lien his other properties if there is any equity--- if there isnt, then this would be a good time to ss the third one....:.).

Here in Florida, Ive succeeded in short selling a 2nd/rental property.I had one that went through 3 different buyers and couldnt close it due to bad bpo's.... by the 4rth buyer, the bpo came in correctly and the seller was forced to miss 3 payments because he couldnt hold out anymore... ,thats when we finnally closed it.....After the payments were missed there was a whole new interest in the deal by "Chase"...( no equity in the homesteaded property)

.I also spoke with a client of mine claiming she had completed a loan mod on one of her rentals...( It wasnt working for her, she may shortsell 3 of her properties....So, frankly....I think he may be able to loan mod the property), if that dosnt work--he probably needs to realize his credit is going to have to take a hit in order to short sale...I hope this helps you... its how my "similar" deals ended up.......Warm Regards, Rose

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Rose Mencia May 3, 2011 at 1:25am

He will have to initiate the ss and include his brothers info in his hard ship letter (Although I doubt theyre going to care...because his brother cant be held to a personal lien, but your seller can.......they may lien his other properties if there is any equity--- if there isnt, then this would be a good time to ss the third one....:.).

Here in Florida, Ive succeeded in short selling a 2nd/rental property.I had one that went through 3 different buyers and couldnt close it due to bad bpo's.... by the 4rth buyer, the bpo came in correctly and the seller was forced to miss 3 payments because he couldnt hold out anymore... ,thats when we finnally closed it.....After the payments were missed there was a whole new interest in the deal by "Chase"...( no equity in the homesteaded property)

.I also spoke with a client of mine claiming she had completed a loan mod on one of her rentals...( It wasnt working for her, she may shortsell 3 of her properties....So, frankly....I think he may be able to loan mod the property), if that dosnt work--he probably needs to realize his credit is going to have to take a hit in order to short sale...I hope this helps you... its how my "similar" deals ended up.......Warm Regards, Rose

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