Foreclosure in Santa Clarita>Question Details

Zsaree, Home Owner in Newhall, CA

what happens to a 2nd loan on a short sale?

Asked by Zsaree, Newhall, CA Sat Jun 30, 2012

Help the community by answering this question:

Answers

7
The best advise I can give you is simple. Sit down with a Realtor you trust. Ask for some References and let them do the work. It is hard enough to walk away from a property.
1 vote Thank Flag Link Sat Jun 30, 2012
Nicely stated David
Flag Sat Jun 30, 2012
Hi Zsaree,

The 2nd loan will also be negotiated during the short sale. If the 2nd loan is with the same lender, then usually they are negotiated together. If the lenders are different, the 1st lender will allow for a certain amount to go to the 2nd lender from the short sale proceeds. The 2nd lender will have to agree to that amount or might ask for more. Feel free to contact me for anything. I also work in Santa Clarita/Newhall area. You may also want to read about the law SB458. More information is available here:
http://short-sale-vs-foreclosure-help.com/what_is_sb458_sb_4…

Good luck
Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Rodeo Realty
Direct 818-903-2040
Dre#01712757
0 votes Thank Flag Link Sun Jul 1, 2012
Sometimes and of course depends on a lot of information I don't have from your question, but often the second works out a discount on the balance owed. I would recommend that you have a professional short sale agent guide you.
Best of luck to you.
0 votes Thank Flag Link Sun Jul 1, 2012
A Short Sale needs to be approved by all lien holders. The first loan must be satisfied before any other. The process is much simplier with only one loan. The second Loan has the right to pay off the first loan. In most cases the first loan is highter than the value of the home so the second loan has no reason to pay off the first. The second and third or even fourth lender will lose the full value of their note if the home is foreclosed. They have the right to stop the Shrot Sale Approval and will do this to try to negotiate the best deal they can. They will accept something rather than losing everything but will play hardball trying to sqeeze out as much money as possible from the first, seller and buyer. Once all lenders agree to the amount of money they are willing to accept it becomes a race against the clock. Call, Text or Email me direct to discuss the process or the list or sell a home!
Web Reference: http://www.TonyLewis.com
0 votes Thank Flag Link Sat Jun 30, 2012
Generally the second lien holder will take a settlement from the first lien holder, and subsequently release the seller's liability. Many short sales involve more than one loan, and the banks frequently work in the spirit of cooperation to make the deal happen and avoid foreclosure.

Current legislation relieves you from future financial obligation if your short sale is approved by all the lien holders.

Having an experienced, short sale certified agent will make the process easier, if you do decide that a short sale is right for you. Such agents have the training, experience and contacts to handle the nuances of a short sale...particularly a short sale with multiple loans and banks.

Please consider all your options carefully. If you have questions, we are happy to assist, and always at no charge. Wishing you the best of luck.

Crystal Sheppard
Sheppard Properties
Santa Clarita
0 votes Thank Flag Link Sat Jun 30, 2012
Both lenders must agree and approve the short sale. Typically the primary lender will pay the secondary lender a small amount of money to get them to agree. After all if the home is foreclosed on the secondary lender will not get anything.
0 votes Thank Flag Link Sat Jun 30, 2012
They must agree to the short sale... typically for pennies on the dollar since they're in second position. But the first will usually make some accommodation for them to sign off.
0 votes Thank Flag Link Sat Jun 30, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer