Chase Wants 20% as the 2nd Lien Holder

I wanted to use this post to share an example of how we all as Realtors can easily get caught up with what we think are changes across the board with some of the banks we are negotiating with short sales.

Recently while negotiating a file with 2 liens, Chase sat as the 2nd lien holder. Imagine my complete shock when the Chase negotiator stated they wanted no less than 20% of their balance to release the lien. He went on to say that anything less would close the file. I've heard that 'we'll close the file' remark more than enough to know it is 90% smoke and 100% crap. Sure they might at some point close a file but who the heck cares. A closed or denied file is just permission to step pasted them to someone above them.

But the point of this post is that unchecked and without previous experience of being lied to and manhandled by a negotiator I may have believed that 'oh my, Chase needs 20% to clear the second'! After doing some homework and calling to some passed negotiators I've worked with they confirmed that 10% will usually clear the lien and in tight offers they will accept as low as 5%. Additionally I found that my current file was in Tampa and that the negotiation team boasts the highest recovery rate of the Chase teams out there. So just in case you catch yourself in a similar scenario just remember when in doubt revert to the numbers. Is your offer better than the amount they would see if the property forecloses?

By the way when you hear them say it's okay if it goes to foreclosure that they have 'other means' to collect. Please don't panic or fall into this trap. There is nothing secret to worry about. They are most often referring to their right in certain states to go after the deficiency after foreclosure.