I have put a contract on short sale home which has two lien holders. Hardship is divorce and both are working.One of the person living in the home has hired real estate attorney and attorney got listed home through a real estate agent.I guess they believe first lien may forgive the balance but the second lender may come back to the borrower even after releasing the lien to collect the “deficit” and they will try to go after their wages etc.
Presently they are not behind the mortgages.If first will offer the 2nd 2000 to release the lien and the second will probably come after them because this is not financial hardship and 2nd will be severely under water on the deal.Does someone know whether this is some what I should wait on or I should fall out and move on. Just looking for some insight.
Sam - In many cases divorce is an acceptable hardship and even though both spouses are working and the paymetns are not behind, the big questions is insolvency of the borrowers. If they can demonstrate that their obligations/living expenses are exceeding what they make, then the bank should be cooperative. if there are assets, then the 2nd mtg co. may ask the seller for some additional payment, maybe over time and possibly a reduced amount (it all depends on their specific case). You need to get those questions answered to really know where this deal stands and then you can intelligently decide to ride it out or move on. Best of luck… Troy
Thanks Troy! It seems to me they have got a lot of assets. Does it mean even Ist will not approve it as short sale? Even if ist approve what would be its outcome if 2nd wont release the lien. In that case ist can foreclose on the home and second wont get anything. My thought is second can still go after them. Am i right? Since they have hired real estate attorney, can he be helpful in resolving this?What are the options for spouses if neither Ist approve short sale nor 2nd releases the lien?