Need assistance on Short Sale

Foreclosures, Short Sales, Tax Foreclosures
1

Homeowner as 80/20 mortgage

First Loan $325000 [Option One] (Attempting to foreclose in a month)
Second Loan $80000 [EMC Mortgage] (Hasnt advised of a foreclosure yet)

Market Value: $400000-$425000

If the property goes all the way through foreclosure, does the second loan just get dropped? Does any money from the sale go to the second mortgage.

I ask these questions, because I want to know how to proceed with the short sale. Its the second mortgage I’m concerned about. What would you do? Any advise?

2

Q. if the property goes all the way through foreclosure, does the second loan just get dropped?

A. Yes, they will not recieve any money. They owe 80k, offer 10%

3

I am in a similar situation with the Crap called
Option One. They are a loan servicer. There are other
large banks as investors doling out the money and
getting serviced thru Optio One. These
are just go inbetweens. Anyway, your best bet is to
get the second lien holder to discount the payoff. Ask
them to do a full BPO and influence it.
That is exactly what i am doing in a similar situation.
My hunch is that i might have to pay off in full to option
One, pay something to the second and get the property.

In most cases, if the auction happens, any excess funds
left after paying off the first goes to the clerk of the
court. All creditors will need to apply for their share of
the excess. The second lien holder is the top one in
the list.

The second lien is wiped off the deed. The lender might
go after the homeowner for a deficiency if it was
not purchase money - a refi or a home equity line of
credit are typical examples.
For purchase money, i am not sure if they can go after
the homeowner.

-krish

4

When I call them and sounds as is I am calling India, I was get someone with an Indian tone. Doesnt bother me at all, just wouldnt think that a lender would have there foreclosure department outsourced.

5

BPO (Broker price opinon). The lender will send a realtor out to the property to see how much the property is worth. You should be out there also to show that property is worth what HO owes.

6

Thanks, I found my answer right after I asked the question, so I modified it.

Good thing for google, which pointed me to an article on this site:

http://www.reiclub.com/articles/influence-bpo

With the second loan, do I offer them 10% off the loan ($80000). So offer them $8000. Do I request a BPO for that loan also?

7

thats up to the lender

8

If the First lien holder forecloses and there judgment is met by a third party bidder… any funds over the first lien holder will go to the second.

If there was no second any funds over the judgement owuld go back to the debtor ( surplus funding)

TG

9

from what i have learned so far u can call the second lender tell them the situation after the first has excepted a offer and most likely they will take a couple thousand, because they know if u buy the first they wont get anything and theirs would get dropped.