Just how powerful is the Junior Lien? And how do you handle them if its a forbearance agreement?

Scenarios #1:  SHORT SALE:  If there are junior lien holders, the agent must negotiate with them as well.  If an agreement is reached to accept a reduced or no payoff you will be required to provide the same documents described for the first lien holder and obtain written approval to close.

Sample letter: Requesting Short Sale Approval from Second Lien holder

OK this is clear for a short sale...

Scenarios #2: FORBEARANCE AGREEMENT: But what do you do if you are trying to come to an agreement with a forbearance agreement?  I had a client working with the first mortgage lender on a forbearance and she is in arrears with both loans - different lenders.  The first is talking to her about a forbearance agreement... well for three months.  But has advised her that the second will not foreclose on her so don't worry about that payment due to the second, because she cannot afford it.

Have anyone had a problem as described in Scenarios #2? If yes, I'd like to know how it turned out for you.  Did your seller have to deal with the second and get an agreement in writing from them that they are OK with the forbearance agreement and they will not pursue payment of their loan????

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Check out: Real Estate Terms/Definitions.  And take a look at Mother and Daughter Blog and D'Adrea's Mother and Daughter Blog  - for other tips for Sellers and Buyers. I work with my daughter as the Mother and Daughter Real Estate Team at Perfect Financial Solutions and we also focus in Short Sales and the Pre-Foreclosure process.  Our consultations are free.  Our aggressive marketing plan includes on-line listing advertising.  If you are thinking of selling or buying a home in Northern California's Central Valley (San Joaquin County CA - includes Stockton, Manteca, Tracy, Lathrop) plus Stanislaus County CA - includes Modesto, Salida, Riverbank) & the East Bay (Alameda County CA - includes Hayward, Fremont, Newark, Union City & Oakland) and surrounding areas give us a call.  If you would like a FREE Home Seller or Home Buyer Handbook, please call us at 866-750-8282 or email at US.

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