Shortsaleopedia

If I have multiple liens, can I still do a short sale?

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If I have multiple liens, can I still do a short sale?

asked July 23, 2011

8 Answers

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Yes. This simply requires the entire short sale package to be submitted and successfully negotiated with two lien holders. In most instances, the 2nd lien holder will be left with nothing at a foreclosure auction, and therefore is more likely to accept some payoff to offset their losses.

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You can still do a short sale provided the lien holders (lenders, HOA or condo associations, city liens, mechanic liens, certified final judgments, etc.) are willing to settle the debt in exchange for a release of lien. Monies owed should be included on the preliminary HUD-1 submitted to the bank for consideration because once a lender accepts a bottom line net payoff it is difficult to go back and renegotiate.

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Yes,any and all liens will be negotiated and satified before the transcation is closed.

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Absolutely, The key is to have a prelim ran on the property and owner. Take a look at your liens most lenders will negotiate, credit card companies that file judgements will be looking for money and most of the time it comes from commissions. You need to consult at the listing presentation reminding your clients to pay all of their other debts on time, because it will help then secure a rental. This will also keep liens from being posted on the property after you think you have cleared all other liens.

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Yes. We have closed dozens of Short Sales that have 2 lien holders, and several that have additional liens such as Child Support and HOA.

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Yes you can. And remomber SB 458 just got passed in California which says if the bank accepts a Short Sale it can not ask for seller contribution of deficiency judgement, so the JR liens have been more cooporative lately

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With cooperation from the second lienholder, short sales are possible when there is more than one loan. HAFA and other guidelines are forthcoming and formulas are in place as to the % the first lienholder will pay the second lienholder at closing.

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As a first step, take a look at the Arizona Short Sale Seller Advisory.

http://aaronline.com/documents/ssseller_advisory.pdf

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