Do I use the same HUD1 for both the 1st and 2nd mortgage holders?
I am not clear on how to create a HUD1 for the 2nd lender…. I only have silver access at the present time, and video that I have access to doesn't explain the HUD1 for a 2nd mortgage.
Can I just send the same HUD1 that I created for the 1st mortgage to the 2 mortgage company? I am not clear on what needs to be changed for the 2nd mortgage co (if anything)….
The HUD for the 1st lender should always show you are giving more to the 2nd lender than you are. For example: Let's say you have $170K net that you can give to both lenders. On the HUD to the first lender you could show you are giving the first lender $150K and the 2nd lender $20K. On the HUD to the second lender you would show you are giving the first $168K and the second $2K (everything else on both HUDs remains the same (purchase prices, taxes, concessions, etc.). The reason for the two different HUDs is that the first is going to say you have to give less to the second which of course you were already planning to do anyway but it makes the first lender feel they are making progress. In the meantime, the second lender is asking for more than the $2K you show you are giving them and so you raise it to what you had planned on giving them anyway. Let's say for example's sake that number is $6K. If both sides agree to these numbers, when the final HUD is prepared, you will show the first lender getting $164K and the second getting $6K and both lenders are happy – the first one made you reduce the amount to the second and the second made you increase theirs and the whole time that was your plan anyway. I hope this helps.
That's soooo Sweet! That makes perfect sense…. Thank you so much for the info.
I may have painted myself in a corner on this first deal. I have already disclosed to both mortgages that the second would only get $1,000 on my initial HUD… I wish I would have read your reply before sending in my offers.
This is a small deal though, my total offer on the purchase price is only $18k
This is my first short sale deal. If anything, I am getting a little practice. Sometimes you have a kiss a few frogs before you find the prince, I may have just kissed a frog
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