Home Buying in 97470>Question Details

Absnikpoh, Home Buyer in 97470

I'm buying a short sale with 1st and 2nd mortgages, my offer has been accepted by the 1st, but they say I need to pay the 2nd too, is this right?

Asked by Absnikpoh, 97470 Fri Oct 21, 2011

Help the community by answering this question:

Answers

5
Phil Rotondo’s answer
The 2nd, even though they may not be entitled to any funds if the property forecloses, can ask/demand that a certain amount be paid to them for their approval. They'll first ask the owner; but if the owner says no there's nowhere else to go but you. Then it'll be your call to pass or play.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sat Oct 22, 2011
In almost every case,were the home to be foreclosed by the lender of the 1st mortgage, the holder of the second mortgage would get nothing. Typically a 2nd mortgage holder will be offered 10% of their mortgage balance, or $10,000 flat, in return for their agreement to a short sale. It is unusual, but not unheard of, for a second to refuse those offers. That's usually the case when the second comes from different lender than the first. If that's not the case, I'm mystified.

That said, everything in a short sale is negotiable, and there's nothing to prevent the first mortgage holder from accepting your offer but demanding that you pay the second. It's reallly no different from any other offer-counter offer scenario. You can accept the seller's offer, reject it and go away, or make a counter offer.

I have made a lot of assumptions here without knowing the facts of your situation and I certainly agree with all who have said you should consult a real estate attorney. If you don't know of any let me know and I will give you a couple of names.
1 vote Thank Flag Link Sun Oct 23, 2011
I have negotiated many short sales. In very few cases a deal is reached when a second mortgage is involved. From my experience the 2nd is offered 5% of loan amount on average. They seldom accept and just go after the owner after the foreclosure. In some instances when a good real estate attorney is involved and the homeowner is considering bankruptcy I have seen thye 2nd accept. The problem that usually comes up is that the second wants more money then the 1st is willing to approve.
0 votes Thank Flag Link Sun Oct 23, 2011
Yes in order to get clear title the 2nd lien has to be released (and by the way the #1 reason short sales fail). Hopefully you are working with a Realtor who can get you the information you need. If the property is listed with a knowledgable agent they should have the information for you. Good luck
0 votes Thank Flag Link Sat Oct 22, 2011
The different rules and regs have set up a situation where the lst can allow for the 2nd to get $3000 and they should sign off on it so that it doesnt hold you up. BUT the 2nd has to agree to it. You could get a 1099 for the balance that was owed as a "gift" you would have to pay taxes on or they could have a collections set up for you. You really need to speak with an attorney and/or cpa to make sure you are covered.
0 votes Thank Flag Link Sat Oct 22, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer