Can I short sale my home if I have two mortgages?

 I have two mortgages on my house. Does that mean I am limited to foreclosure or can I short sale my home?

You can always pursue a short sale. It becomes a bit more cumbersome at this point though.

The key here is to understand a short sale is simply a negotiated settlement. It is an attempt to workout an amicable and mutually beneficial solution with your lender, when you are upside down in your property, and must sell it.

The fact that there are two loans means that there are 3 negotiations that will run simultaneously.

1. The negotiation of what the second lien holder will require to release their lien.

2. The negotiation of what the first lien holder will require to release their lien.

3. The negotiation of how much the first lien holder will agree to give to the second position lien holder.

The 3rd piece here is the most important and there are some guidelines that we use. Most first position lien holders are reluctant to give the second position more than 10% of their payoff balance. Most second position lien holders will settle for 3,000 or 8% of their payoff balance whichever is greater. Note this is most, not all, and in no way guaranteed.

If you are in a position where you are upside down and have more than one loan against your property, make sure you work with an experienced short sale agent that can counsel you through the process!  We handle a lot of short sales in Tucson, and can guide you through the process of short selling your home in Tucson.  Contact us today for more info!

Jerimiah Taylor Tucson Homes and Real estate