2nd Mortgage Guide

An investor provides the cash for a loan to the borrower. A loan servicer manages the payments from the borrower for that loan on behalf of the investor. Many of the loan servicers also provide loans themselves separate from their servicing departments, like Bank of America. What happens when a borrower requests a short sale and they have a first loan that is serviced by Bank of America, who is working on behalf of a different investor, but also has a second loan on which Bank of America is the investor. The servicer makes all of the day to day decisions for the investor and heavily influences the investors final say as to approving a short sale. If the short sale goes through the 2nd loan will receive practically nothing since there will not be enough proceeds remaining from the short sale to even make the first lender whole in most situations. Is there a potential that the loan servicers will prevent short sales on properties they hold the second loan for? Here is the press release from the office of Representative Brad Miller (North Carolinas 13th District) - bradmiller.house.gov Do you think legislation is necessary to help prevent conflicts of interests between the loan servicers and the loan investors? Do you think the different departments within banks talk to each other? Leave a comment below and let us know your opinion. For more real estate information and North Scottsdale Real Estate news visit www.North-ScottsdaleRealEstate.com

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