In our experience the second has to get something...
Usually when you send your offer and preliminary HUD-1 from the title company with your offer and other documents we usually show $1000.00 going to the 2nd lein holder. You will meet some resistance but the 2nd knows that if the 1st forecloses they get absolutely nothing.
Also once into negotiating back and forth between what the 1st will give the 2nd if you need too get them on a 3 way conference call... we've had to do that and it worked out well to have the decision makers from both lenders on the phone with eachother to hash out what they're both gettting and not getting.
There are various other possibilites too but too many to discuss in a comment... check out my other blogs on short sales if you need more information
It's not easy... but it happens... we've successfully closed short sales and have approve bank prices on many of our other properties
In the case I have right now, lender 1 is in first position, they could care less. They are going to get a full boat. It is the second lender getting the short end of the stick.
Of course, every situation is different.
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