You most definitely need to hire an real estate attorney at this point. As we may be experts in the real estate profession, none of us can offer legal advice. With that being said, is the second mortgage the same lender? If not, when there are two different lenders on a short sale property, BOTH lenders must approve the short sale offer. In the past and prior to the inflation of short sales and foreclosure properties, the second lienholder (typically the lienholder for a home equity loan/line of credit, etc) was getting beat out of short sales. The primary lender (typically the original mortgage lender because not only are they the first lender/payee on the property but also because they are usually owed the most money) would call the shots on a short sale and the second lender would not collect anything. Over the past year or so the secondary mortgage lenders have now been demanding that they receive some of the proceeds from a short sale. So if the second lender is not the same as the first or has not yet been made aware of the short sale of the property...your timetable may start all over again. Is this the first time you've learned of the second lender? Even if its your first time of learning there is a second lien, was the listing agent aware? If the agent was aware, they should have contacted the second lender, along with the first lender when they submitted the short sale package.
Again, seek the advice of a real estate attorney to determine what is best in your situation.
Gina Chirico, Sales Associate
Prudential NJ Properties
973-992-6363 ext 116