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Hi Steve for Wilhelmy Homes hey thanks for stopping by the site
Want to reach out to people today that are thinking about a short sale
and have a second mortgage and not sure how that impacts it
Well what I'll tell you it's very critical that you know exactly what's going on
When a second mortgage is involved
The reason being is it's a lot different than a first mortgage because in most cases
First mortgages will waive deficiencies in a heartbeat
They'll do it right away because there is a law in Minnesota that if they choose to
go through foreclosure
If they chose to go through a certain path
They don't have the rights to collect on the deficiency
I did do my disclaimer the last time around and I'll do it again
I'm not an attorney
Please don't take this as a legal advice
If you want legal advice
I've got a great attorney that's a fantastic real estate attorney that can give you that
legal advice
But coming back to the seconds
They actually have a right to come back and collect if you would foreclose on the property
But if you short sale
You have the opportunity to negotiate with them
In many cases
They will negotiate and especially with that deficiency piece
And they understand the business
They're in the business of lending money
They don't want to sit and hold up of this account and keep it open
They want to be able to move on
But they're going to try to get as much money as they can
Because you know they lent you 20, 30, 50 and maybe even a $100,000 on the second mortgage
And so they're going to go through and see what they can do to get that money collected
The most important thing
Just like in the first mortgage read the approval letter
Make sure the approval letters specifically says the account will be settled
You know there's a comment record on the credit score
Paid less than full balance
Paid as agreed and then they'll use words like we waive our right to collect deficiencies
in the future
Wording to that effect that basically says once we sign off
And once the house has been sold
We're done we won't come back after you.
Very very critical to have that information in your hands before you move forward with
the short sale
Because the last thing you want is to complete short sale
And a month later you get a phone call from the second mortgage saying
Great short sale is done
Thanks for the couple of dollars
Oh and by the way
We'd like to have the rest of the $40,000
Would you like to send us a check now
Or should we just sue you for it
I don't know that they're saying that but that potentially is what could happen
Because they still have a note in place that needs to be resolved
So extremely critical when you're dealing with second mortgages that you know
That you're working with somebody that understands it and can get the job done
If you'd like to talk about your situation
And see if a short sale is your best option and how to handle a second mortgage
Sometimes even a third mortgage
Feel free to give me a call
My number here is on the screen
Also you can reach out to me via e-mail
Love to chat with you
You can feel free to comment on the blog too whatever way you'd like to get a hold of me
I will be more than happy to chat with you
And give you whatever information I can
Again it's Steve from Wilhelmy Homes
And thanks for stopping by the site
Have a great day