Short Sales and Potential Problems with Second Lien Holders

By
Real Estate Broker/Owner with Broadpoint Properties Cal BRE #01324959

 

Short Sale ApprovalsIn a short sale transaction, the person who is doing the negotiating and trying to get the lien holders to agree to the short sale (usually the listing agent) has quite a lot of work to do. Obtaining approvals on short sales is no easy task, and often times the second lien holders (who often will only receive a few cents on the dollar) use unique and challenging tactics of debt collection. 

In this short video, Melissa Zavala, the Broker at Broadpoint Properties and a nationally recognized short sale expert, answers one person’s questions about short sales and negotiating with second lien holders. 

Remember that a short sale is a transaction where a property is sold for less than the amount owed on the loan(s). And, in a short sale, banks agree to permit the sale and accept less than the amount owed on the note. In this particular situation, it sounds as if one of the lien holders really does not want to agree to permit the sale. Have a look. And remember, if you have any questions about short sales, please do not hesitate to contact our office.

 

 

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Groups:
Short Sale Specialists & Pre-Foreclosure Education
Short Sales and Forclosures ONLY
Short Sale REALTORS®
Short Sale Heaven for 2011
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short sale approvals
short sale negotiations
second lien holders and short sales

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Rainer
52,347
Joyce Herr
Prudential Lancaster Real Estate - Lancaster, PA
Lancaster County & Beyond

Thanks for the tip. I am working on one now with a 2nd lien holder. If I do run into this, I will have my sellers consult with an attorney.

Mar 16, 2011 09:29 AM #1
Rainmaker
1,149,875
Ginny Gorman
Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond
Another helpful q & a for the consumer & realtors, Melissa..
Mar 16, 2011 10:03 AM #2
Rainmaker
591,234
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Melissa,

I'm disappointed!

I'm not an attorney ether! But, I've never heard of a law that would force second/hundredth lien holders to accept a short sale! For that matter there is nothing, but (Dare I say?) common/uncommon sense! Banks and other lenders accept short sales because they see it as in their best interest! (There have been many Communist proposals for the right to steal the lender's money, but as yet no laws!)

By providing a non-answer to a non-question you imply the existence of a non-existent entitlement to steal money! Gunmen stick up banks! Short sellers negotiate settlements!

There's also more to consider! All lien holders must be satisfied! Some states automatically create liens for Hospital bills, garbage, water and sewer all must be settled if they've recorder a lein. Don't forget the IRS if they've recorded! (The IRS can be dealt with.)

Then there is the possibility of unrecorded liens! The two that come to mind are: Those created by "actual notice" and "Mechanics/Vendors liens that have a grace period that can make them just as valid as recorded liens! (I know every one is thinking you don't improve a home you're about to lose, but you do keep it livable! Has the plumber who fixed the broken pipes been paid, depending on your state he could file a valid lien 30 to 180 days after the work!

Check with your attorney is great advice! Short Sales are normally great opportunities for the seller, but it varies!

I remain a big, very big fan!

Bill

 

Mar 16, 2011 10:50 AM #3
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Melissa Zavala

Broker, Escondido Real Estate, San Diego County
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