Short Equity Sales with 2 or more lenders

Real Estate Agent with RHS Realty
Hi everyone,  I was just looking for some input on what success you have had dealing with short equity sales with 2 lenders, where the second lender will receive nothing from the purchase agreement.  What is their incentive?  Do they often just sit tight and refuse to release their lien because they won't receive anything?

Comments (4)

Scott Slocum
Florida Future Realty Inc. - Cape Coral, FL
Scott Slocum & Associates 239-222-4800, Cape Coral

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

Nov 02, 2007 12:50 PM
Kevin McGrath
Long & Foster Real Estate Companies- Fredericksburg/Spotsylvania - Fredericksburg, VA
Long & Foster Real Estate Companies

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.

Nov 02, 2007 12:52 PM
Rod Toussaint
RHS Realty - Prior Lake, MN
Thank you very much!! I'm going to your blog now.
Nov 02, 2007 12:53 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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