Video-How does Mortgage Insurance payout on a Short Sale

My Boy Jason “MoneyMan” Medley in Tampa, Florida does a great job of explaining mortgage insurance paying out a full claim on a short sale. he owns Ivisionary Financial a company that provides transactional funding. He buys property and also owns a loss mitigation company that negotiates short sale debt similar to Coastal Mitigation Partners. His blog is www.backtobackclosingsmadeeasy.com.

Jason explains why sometimes it is a good thing to do 2 fully funded transactions to remedy the potential promissory note that rears its ugly head at the point of short sale approval. A Back to Back closing is when the homeowner sells to Investor and Investor sells to retail buyer for a small profit. The banks and investors are pushing and asking for promissory notes and for the sellers to cough up $1000 to $5000 to get them to release the lien in full. Especially on non owner short sales. My future prediction will be that Fannie Mae and Freddie Mac shorts will start to ask more often so I recommend sellers start to put money in a side account saving up for it rather than deposit into a escrow account. That way it doesn’t get sprung on them and the deal falls apart because the sellers want to walk away.

Jason is one of those great guys who makes it possible to “Buy Out” a promissory note by taking less profit in a “investor” type transaction. In certain cases he may give more to a 2nd Lien holder to get them to release the lien and not pursue deficiency and/or get them to waive the promissory note by giving them cash today. In a retail short sale scenario typically the buyer would not be willing to pay for someone else’s promissory note or shortage of cash required contribution.

In this video it is a slightly different case. These types of transactions work very well when there are excessive property repairs that would not pass FHA lending standards. Around the 7 minute mark of the video he breaks down how the mortgage insurance company is attempting to squeeze the homeowner for a $10,000 promissory note. It helps break some of the “Short Sale Code” of how banks think and how they come to their short sale decisions.

If you are an investor looking for a processing company to help you negotiate your short sales where the properties won’t pass FHA, feel free to contact us we can help you here locally in the northwest.

JB Beyer

Coastal Mitigation Partners

503 770 0050 Office

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