Hollister CA – Last we discussed how to avoid getting into a jam on short sale negotiations when there are two mortgages on the property.

We received a question from another agent on short sale negotiations. Here is her email.

"I have been working on a file with two mortgage. The second mortgage wants $7500, or the lender won't approve the short sale.

"The first mortgage will approve the short sale, but they aren't willing to pay the second mortgage a dime. The sellers live elsewhere and do not want to pay anything.

What do you suggest beyond contacting the negotiators and 'escalating the short sale file'? ~ Diane"

Click here to discover how other sellers successfully executed a short sale and avoided foreclosure.

Here is our answer to Diane's question. The good news is that the second mortgage responded fast. You need to convince them to accept a lower payoff.

Here are a few general rules with first and second mortgage negotiations.

Rule #1: Most first mortgages will pay the second mortgage 10% of the total amount owed. So, get the second mortgage to give you a payoff. Then ask the first to allow the second mortgage to get paid 10% of that total.

Rule #2: Fannie and Freddie will allow only $3000 to second mortgages on a short sale. It doesn't matter how little or much they are owed.

This loan is probably owned by the first mortgage company. Its short sale policies vary all over the place. Here is what I would do from here.

First, get the second mortgage to accept less down, unless they are asking for 10%. Then escalate the file at the first mortgage. You may have to escalate both files.

The first mortgage not paying the second mortgage a dime is really stupid. The negotiator may think he's smart because he negotiates hard. Good for him.

He's actually stupid, because he's causing the company to lose money. Send him the example below about another stupid lender that negotiated too hard and lost $50,000. Here is the story.

We met some buyers at an open house who told us they were buying a house for $272,000.

We had a house for sale two doors down from the house on which they had made an offer. The house they were looking to buy was a short sale. They mentioned that the short sale had dragged out for months: something about three mortgages and the junior mortgages were hard to work with.

We talked to them a couple months later to see if they would consider our listing. They wanted to wait it out for the other house. The house ended up selling for $225,000 after those buyers had walked. That's a big loss for the short sale lender. Show those numbers to the first mortgage and ask the negotiator to reconsider paying the second mortgage.

Thinking about a short sale? I can help you short sale your property so you can move on with your life. Send me an e-mail at israel@ighomes.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (831) 636-8858.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification?Our Hollister loan modification guide will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail to israel@ighomes.com to request a Free Copy.

Or, click here to request a copy.

Thanks for reading this.~Israel Gonzalez.

Israel is a Real Estate Agent at Beale Properties.

Phone: (831) 636-8858. israel@ighomes.com.

View My homes for sale at www.bestREOhomes.com.

Israel Gonzalez specializes in loan modification assistance and short sales in Hollister California. Hollister Loan Modification Help, Hollister Short Sales. Hollister Short Sale Realtor Hollister CA Short Sales. Hollister Realtor.

Important Notice

Israel Gonzalez, Beale Properties, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorse by the government or your lender. Most lenders willingly work with agents on short sales. Why?

Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.

However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.

We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.

This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.

The views expressed here are Gonzalez's personal views and do not reflect the views of Beale Properties.

This information on "How to Get Out of a Jam on Second Mortgage Negotiations on Hollister Short Sales" is provided as a courtesy to our readers to help them make informed decisions.