I have a house with first mortgage of $295,000 and credit line of 180,000. The house is on the market for sale for 9 month with no offers, asking price $599,000. Last house in my area sold for $500.000 about 4 month ago. I would like to short sale the house, but I’m not sure how to handle the 2nd mortgage. any idea?
Thanks
Can you clarify for me: The second credit line has been drawn down completely and you have no more available credit line?
Regardless of the answer, your only option is the second agreeing to settle for less money. What is the property worth now?
You see the first is plenty secure and in great position holding the First Trust Deed, and the second will want to get every available dime from the sale of the property.
Contact your Second Trust Deed, they may allow you to do a “Deed in Lieu of Foreclosure” which assigns them immediate rights to the property.
This option would force you to pack and be out in 7 to 14 days!
Basically this leaves the property in your seconds hands and they either decide to pay your first or they let it go to foreclosure and lose there principle dollars.
But the scenerio you describe tells me although your 2nd TD Lender will not get all there dollars, it is probable worth them keeping and servicing it and selling at some controlled loss. Even if they sold the property for $425k they would preserve over half there principle.
Chances are in this case they would rather have you out and handle the sale of an empty property, there are no surprises for would be buyers and no expectations broken by not meeting there expectations for cleanliness and potentually delaying or holding up showings.
Talk to your 2nd TD Credit Line Lender! (HELOC)