Understanding A Short Sale
Of 2nd Mortgage Loan

A short sale of 2nd mortgage loan can be much easier than shorting the 1st. Most times a second loan gets completely wiped out if a property goes to a sheriff sale.

A first position lien holder may hold out and be a little more difficult to negotiate with. If they know there is equity in the property and a second loan behind them, the ball is in their court.

A second position lien holder understands that they have everything to lose if the property gets foreclosed on. Their whole financial interest in the property is at stake.

This creates a huge opportunity for you to wipe out the second loan down to as low as 5-10% of what is owed. Your attitude when negotiating should be that something is better than nothing. Believe me, most times they agree.

The ideal short sale candidate has a large enough 2nd position lien to make it possible to not even attempt a short of the 1st. Go straight to the first, get your acceptance letter and close the deal. Don’t attempt to short the first if you don’t have to, it’s just easier.

I know some investors that look just for big second loans to discount. Real estate agents and investors who don’t know how to short sale need to learn fast, they are missing out on big opportunities.

A short sale of a 2nd mortgage is easy and can be done faster than discounting a first.

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