I have been working on a case for a client who has a short sale. This is not an ordinary short sale. Based on the facts, one might think it is “better” than the average short sale. You see, there are two loans on the property but only the second loan is short. Chase holds the second loan. It seems to me that this makes Chase believe that when they’re in a second lien position but only the second is short, they can do whatever they want!
We were just informed today that Chase is demanding $10,000 cash more than our projected proceeds to the second lender. They are also reserving the right to pursue a deficiency, although, for an additional payment, they will drop that demand. Worse yet, they will not allow the payment of real estate broker commissions in excess of 4.5% nor will they allow for the payment of any Seller’s attorney fees.
I do not want to seem self interested, but how can an attorney help a seller client with a short sale if Chase Bank will not allow the attorney to be paid? How can Chase Bank expect real estate brokers to be interested in helping seller clients with a short sale? It is my understanding through the grapevine that when Chase is in the first short position, they will cap attorneys fees at $1200. Mighty nice of them!
It has been reported to me that this is not the Chase policy. I am looking into it and trying to get a copy of the policy. It is possible that this is just a short sale negotiator run amok, but at the end of the day, it is not helping to get the deal done.
We were informed that although second lenders routinely receive only a small amount of the proceeds in a usual short sale transaction, because the first lender was being paid in full, Chase had different “policies”. Unfortunately for Chase Bank, they will be involved in one more foreclosure this year and they have just contributed to one more REO this year. Policies like this do not make sense.