Hey Wayne,

Saw your question and while you probably have most of your answers by now, I thought some clarification would help just in case...

You DO NOT need to have the junior lien holder first agree to release their lien before the first mortgage holder reviews the file. Everything is contingent on the first mortgage lender agreeing to doing a short sale - not the junior lien holders.
When I work with my clients, I contact the first mortgage holder to begin the process. If they don't agree to the short sale, or come in with a high BPO, then the short sale may not happen...So it's best to get busy working with them asap to get the BPO done...this is the basis for ALL negotiation on the short - primarily with the 1st mortgage lender because the junior lien holders know they will lose everything if they don't take a deep discount. So, they really don't care about the BPO or ask for the results before they agree to a discount. The junior lien holders know that if they don't agree to negotiate to release the 2nd (or 3rd) mortgage, the first mortgage holder will foreclose, or whoever pays off the first mortgage doing the short sale will foreclose off the junior liens - that means they get nothing. This past week we got a homeowner we're representing in Ocean County an approval from their 2nd mortgage lender to release a $75k mortgage for $7400. They are not even concerned about the numbers we are working with the 1st mortgage lender.

When I did my first short sale in 1994, I negotiated things that the listing agent and closing attorney told me would never work. So, while advise is important to get, logic rules. Present your case with credible facts and evidence just like you would for a court case. The lender is the jury and you need to convince them with a compelling argument. But it is well worth the effort!

Don't hesitate to email me at thinz@apexgroupus.com if you have other questions...I don't read this blog every day...so you can reach me faster via email if urgent.

Yes, short sales can take long because the bank must approve the sale due to the fact that they are taking a loss. If there is a 1st and 2nd mortgage on the property than it can take even longer because the Jr. Lien holder (2nd mortgage) must first agree to release the lien before the 1st mortgage can even review the file.
The buyer can wait months for approval and then the bank will say yes or no. Short sale homes are also sold "as is". If you have specific questions feel free to email me at heather@heatherdaccurso.com

Hi Wayne,

Oh Ok, that makes sense. Short sales can be tricky, or straightforward. They are often unpredictable so it's best to check your emotions at the door before climbing on for the ride. Here is a good discussion on the subject in the link below.

Good luck!