Possible? SS 2nd and Sub 2 the 1st?

Hey All,

I got a call about another one of my letters.

House appraised at 350K a few months ago, but comps (8 months old) put it around 300K. Market is VERY soft here, so I am thinking I could work a SS on the 2nd and get in the house for the 1st. My realtor is working comp listings right now for me.

1st Mortgage is at 215K
2nd Mortgage is at 40K

I think the mortgages are with two different companies, but he didn’t seem to certain and the public records didn’t make it clear to me either.

Is it possible at all to short the 2nd mortgage and then sub 2 the 1st mortgage while I try and sell the property? Is there anyway to work this?

That would allow me to float the 1st mortgage for a few months until it sells instead of getting my own financing.

I really would appreciate opinions on this and if it is possible, how?

Thanks all!


Anyone? I would appreciate it?


I asked the same quesiton about 1-month ago…
pay off the 2nd and take over the 1st on a short sale
I did not get one response…
Have you found out any more information on doing this?
Shaun Greer
Boise, ID

Nope, no love…

I know there is at least on guru who can help on this one?


Joshua and Shawn,

First and foremost do you have the deed ? If not your wasting your time with a SS.

It’s very simple, short sale the 2nd and keep the 1st in place. If there’s plenty of equity in the property, bring the 1st current by making up any back payments.

I have had the same question on my mind (bring the first mtg current and short the second - seems like an excellant stategy), however there appears to be a couple of hurdles. First, the second mortgage holder may request to see a copy of the sales contract in addiition to a HUD-1. Both should or may indicate the first mortgage will be reinstated and not fully paid off (subj 2) at the time of closing. My question has been this: does the second position mortgage holder really care how the first mortgage is being handled, is this a deal killer? I can handle the paperwork, my concern is how will the second mtg holder view this type of acqusition? Any advice would be welcome. Mark. I am not asking for people to speak for a lender, just interested in guidance in this type of financing strategy.

Why would I take a deed when there are still mortgages against the property?

You take the deed to help to secure your position in the mind of the seller. I think cfinster means to get that deed as soon as you can. You’ve got a line on place with nearly 85k in equity in it based on your comps.

Is this person behind on their payments? Has the 1st filed for lis pendens or NOD issued? If not and he is still paying the 2nd will most likely not short. Now throw in that the total owed is 255k and market value is 300k. Why should they short? If I were them I would require that the home be listed with a realtor before I would consider a short.

From what you have written this may not be a great deal unless you already have somebody ready to buy at 300k or you can short the second a significant amount and then find a buyer.

How much is the owner expecting? What are your plans for this property?