Attempting to do a short sale may be a challenge when there a foreclosures on homes with multiple mortgages. For example, there may be a situation where the foreclosing lender with the highest amount due is in the second place, and the second lien holder with a substantially lower amount is in first place. This can happen because the second lien holder got to the courthouse first and recorded ahead of the larger mortgage holder.
In these situations, the largest mortgage holder is going to ask in the foreclosure action for the equity court judge to declare that the first lien be declared paid in full. They will also request that they be placed in first place and be granted the foreclosure action along with any taxes, insurance premiums and other expenses which maybe due and attorneys fees cost for their action. An this is, of course, the only fair and legal thing to do. After all, they are the primary lien holders.
Many wonder what the best course of action should be in this situation. As it has not gone to sale yet, you could absolutely be trying to do short sale. The foreclosure market is at an all-time high, so the opportunities to profit from foreclosure investments have never been better. With short sales, there are different techniques you can use to discount the amount of the loan from the lender. You can discount it down to what is owed as opposed to what the value of the home may actually be. Short sales are becoming more and more popular because of the large discounts that they can offer. But one point of concern might be that while they're in litigation trying to get it moved in the first position that they might be reluctant to finalize a short sale.
It still never hurts to ask. Lenders have made unusual decisions over the years, decisions that you would think they would be willing to do. And it doesn't cost a nickel to ask. So proceed with the short sale just like you would any other short sale. Be sure that you consider the condition of the home as you are trying to do this short sale to work in this estimate of repairs in with the final amount.
Your ultimate goal is to close the deal. You gotta have the patience of Job to be a short sale expert. The end result can have quite a payoff!
For additional information on real estate investing and the hot foreclosure market, I recommend joining Ron LeGrand's Millionaire Maker Newsletter at http://www.MillionaireMakerNewsletter.com The newsletter itself is loaded with great tips and resources, and he's usually giving away something free like a CD or something that generally has a lot of great information on it.
Source: www.isnare.com
