Second Mortgages and JR. Liens in Foreclosure.

Types of junior lien holders include a 2^nd mortgage, equity line, home equity loan, and homeowners or condo association. Please refer to the section on homeowners and condo associations for discussion as to this type of junior lien. 2^nd mortgages must also agree to release their lien for less then they're owed to complete a successful short sale. Typically, the 2^nd mortgage holder will require the same paperwork and same financial analysis conducted by the primary mortgage company prior to approving a short sale. Often times, only one of the two lenders on a home will approve a short sale proposal. This is an unfortunate result considering a 2^nd mortgage in the current market will gain nothing by withholding approval for a short sale. If they force the matter into court they are unlikely to payoff the 1^st mortgage because the loan is too expensive and the fair market value of the house is falling. If the 2^nd mortgage approves the short sale then the same issues concerning tax liability will apply.