, Franklin County, OH
Dear Home Owner, I have to completely disagree with Diane. I work as a Short Sales Analyst at a major bank in central Ohio. I can tell you that you should be working with both of your lienholders. Communication is key especially during a short sale. I have completed many short sales where the seller relied soley upon the agent and would not talk to the bank. After the short sale was complete the bank would end up with a call from the upset seller because the agent did not provide them with adequate information about the process or deficiency balance. The lender on your 2nd may not agree to release/settle for $5k for you to stay in the home but I guarantee they may very well be more likely to negotiate a settlement at a higher amount. Typically, the negotiations begin at 50% of the unpaid principal balance. Generally, your lender may see that they will recoupe more on the dollar thru a settlement than on the short sale. When a lender has a 2nd lien position they are more likely to net only $3k or 10% of the unpaid principal balance (whichever is less) + any add'l monies that may be negotiated with the seller. In the meantime I would work with your 1st lender to see if they will modify your payments to make it affordable on a monthly basis so you can stay in the home (if a hardship is applicable). I hope this helps. Also, per the comment from John.. do not pay for a 3rd party negotiator. Banks are already taking a loss from a short sale. Believe me most banks will not agree to pay their fee because those funds could be used towards the unpaid balance. (esp in they are in a jr. lien position). Work with your bank...its FREE! May I ask who your 2nd lender is???