So, if the second-mortgage holder foreclosed, the foreclosure sale proceeds wouldn’t be sufficient to pay anything to that lender. That’s because all the money from the foreclosure sale would go to the senior lender. But the second-mortgage lender could still sue you personally for repayment of the loan.

Can you do a short sale with equity?

#1 Qualifier for Short Sale Is No Home Equity In the second example above, it is easy to see that you don’t have to necessarily owe more than your home is worth to be a candidate for a short sale. You simply must have not enough equity to sell.

Can you do a short sale with a second mortgage?

A second mortgage, just like a first, gives the lender the same power to foreclose as the primary mortgage. The second mortgage holder has to give permission if you want a short sale instead.

Can a mortgage company refuse a second charge?

In short, yes. A mortgage lender can and will refuse to allow a second charge to be registered against their security, your property, if they believe that by giving consent it will increase the risk of them making a loss on sale if they repossess the property.

Can a second charge repossession?

A second charge is a secured loan but it will have less precedence than a first charge. If the borrower defaults on either the first or second charge, either lender can instigate repossession proceedings. In this case, the lender will have to look at other ways to reclaim their outstanding debt.

Which is the most likely consequence of a short sale?

There are a variety of consequences for the owner of a short-sale property.

  • Mortgage Cancellation. A mortgage payment that is too high for a homeowner is the most common reason for listing a property at a short sale.
  • Deficiencies.
  • Credit Standing.
  • Second Liens.
  • Tax Consequences.

Can a second lien holder delay a short sale approval?

The second lender may not receive funds from any other interested party to the transaction, including the seller, buyer or agents. Difficult negotiations between first and second lien holders can delay short sale approval.

What happens to a second mortgage in a short sale?

Second mortgage loans take the biggest hit in a short sale. In a short sale, the seller must request approval of the sale from the first mortgage lender, also known as the primary lien holder and the second mortgage lender, known as a junior lien holder.

How does a short sale work in real estate?

In a short sale, the seller must request approval of the sale from the first mortgage lender, also known as the primary lien holder and the second mortgage lender, known as a junior lien holder. As the main decision-maker in a short sale, the primary lien holder sets the sale parameters, such as price, closing costs and the closing deadline.

Can a second lender release a lien on a first mortgage?

First mortgage lenders usually offer several thousand dollar to the second lender to persuade it to release the lien on the home and allow the deal to happen. As of 2013, secondary lenders commonly hold out on granting approval in an effort to get more money out of the first lender.