What do you do when the MIP company wants seller to pay like $40,000?

Any advice? I have a realtor friend who got her B of A short sale approved, then along comes the MIP company and throws a monkey wrench in the program by demanding $40,000 from seller. This is NOT going to happen. Seller has even offered $10,000. Why would MIP be so stupid? We are almost closing escrow by Nov. 30, 2010. If home goes into foreclosure they get nothing? Any help?

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They do it because they have nothing to loose. They have to pay out the insured amount of the loan even if it goes to foreclosure, so it doesn't matter to them if it forecloses or not. Its a messed us situation, but you're seller probably doesn't have a choice. The good news is that it is unsecured debt, and is typically settled for pennies on the dollar if collected on at all.
And an old real estate saying always holds true, everything is negotiable...
Do they want the 40K in cash or a note? Is it in addition to the 10K?
Well that's too much. But you better tell this to a lawyer.

Negotiate Negotiate... How much money does the seller have?  Most likely they think the seller has some or can put up that money.  Counter the offer.  Tell them the seller will do a $40,000 note or $15,000 cash at closing.  You have to keep pushing.



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