Short Sale on 2nd w/EMC

Short Sale Scenario:
There is a problem as the 1st mortgage(Homecomings) will only allow the 2nd with EMC to receive $1k ($82k balance) and the 2nd declined this and countered at $15k.

The 1st will not allow the 2nd any more than the $1k… but it does not state this or any other language about junior leinholders in their approval letter. The 1st has only told me VERBALLY on the phone that $1k is the max to the 2nd.

What is the best avenue to take as far as securing the property with closing with the first and allowing the 2nd to be paid either $4k or $8k(10% of payoff). Say I paid the 2nd off at $8k and told the 1st that they settled for $1k? How would you get around this showing on the HUD and avoid any fraud (remember that the approval does not state the 2nd to receive only $1k)?

THE APPROVAL STATES from the 1st states that they are to receive $218,400 when the contract had an amount of $219,400 with my HUD showing $1k to the 2nd with EMC. THE APPROVAL DOES NOT STATE ANY LANGUAGE ABOUT JUNIOR LEIN HOLDERS… Doesn’t this allow me to settle with the 2nd for more??
Any input on your experience would be greatly appreciated.

EMC is just playing hardball. Every 1st TD holder who shorts a property will not allow the 2nd more than $1K through escrow. This isn’t something new. EMC has most likely heard it a thousand times before.

You have two choices. The first is to tell EMC, oh well, thanks anyway. Maybe I’ll see your rep at the auction. Or…

You can pay them $14K out of escrow and $1K through escrow. It depends on you and how much money you stand to make… or lose.

Is EMC an actually lender?

Whenever I dig into who the lender is it often list EMC but further investigation I always find a named(homeq,wells fargo,fremont, etc) lender.

This may be it:

EMC Mortgage Co
Phone: 800-695-7695
909 Hidden Ridge Dr Suite 200
Irving, Texas, 75038