Short sale Promissory note

I worked out a Short sale with with my 2nd mortgage and they want me to sign a promissory note for $12,000 above what they get from the first (approx $4000) or they will say no and make the house go into forclosure. This seems a bit over zelious to me. If it went into forclosure they wouldn’t get crap. Is this standard? and is it something I should go ahead and sign or do think they are just feeling it out to see if I will sign. The note they want me to sign is for 84 months with no interest, penalties or late fees. Should I try to negotiate and see if they will accept me signing for less then $12,000?

Owed on house = 214000
1st mortgage = 171,000
2nd Mortgage = 43,000
House valued at 178,000
Contract on house = 175,000

Are you a FSBO doing your own short sale? Let me know who the banks are for both mortgages. I would think the $4K from the first is sufficient. How close are you to auction? I personally would play hardball with them and let them know you don’t have the money. Did you send them the same financial paperwork or short sale packet you sent to the first?

Actually, I did just that…played hardball. We worked out a deal where we agree to pay them 5000 over the next 84 months with no penelties, no interest, and no late fee’s, and when that is paid off they will report the full 43,000 as paid in full. The 1st is actually the one giving me trouble now. it’s ALS and they seem to be taking there sweet time with everything. They wouldn’t do a loan mod for me and now they are taking there sweet time with the shortsale (which was my only other option other than forclosure) even though they are only losing about 7000 in the deal. I owe them $172,000 and the contract is for 176000 so after all there fee’s and what they are paying out to the 2nd they really aren’t losing that much. I don’t get why they don’t just take the money and run. My buyers are prequal’d and are coming in with 10% down. you can’t asl for much of a better situation. (except me keeping my home).