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If you’ve been aggressively pursuing short sales (the way you should be these days), you’ve undoubtedly run into great deals that wouldn’t close because there was a second loan on the property that was going to receive almost nothing from the first lien holder, right? Well, the good news is that by creatively presenting an offer to the senior lien holder, you can often persuade them to kick enough money to the second mortgage to get the deal done, OR you can offer monies in an escrow account to be credited to the second lien holder at the time of closing by the “buyer” or “seller.”

The second scenario usually comes into play when there is an investor in the middle of the deal buying in order to resell, and can take the additional funds promised from the spread of their deal to satisfy the second, and move forward on the closing. This alone is one of the main reasons working with an investor on short sale transactions can be so lucrative! Learn more about how to make huge checks with short sale investing

The mechanics of foreclosure mean the junior lien holder probably won’t get anything from a foreclosure anyway. What that means to you or whoever is negotiating the short sale is that the junior position will usually release their interest in the title for a very small percentage of what is actually owed.

In most parts of the country, the first lien holder has the right to collect all they are owed from a foreclosure before the second mortgage sees anything. Additionally, the second mortgage must file their own foreclosure process for this to happen. Filing for foreclosure requires the second to bring the first mortgage current by paying missed payments, late fees, foreclosure costs and other charges. With this thought in mind, it is not an appealing alternative when the house is under water and the second isn’t likely to get anything, so they are forced to cooperate!

If you are want to know more on becoming a short sale investor, the short sale process, or just want to get some great information regarding living life on your terms through real estate, please be sure to stop by our site, Mr3Days.com, and get the free training available!

Article Source: sooperarticles.com/real-estate-articles/how-deal-short-sale-2nd-lien-holder-281914.html

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mr3days.com/Author: Mike Mike