Recently, it has become more difficult to obtain short sale consent from the second lien holder. In the past, the first lien holder would offer the second a token payment of between $1000 to $3000, which the second would agreed to accept as they will get nothing from a foreclosure by the first. Now however, the second lien holder is insisting that they want more money than the token payment in order to approve the short sale.
Their argument is that the first lien holder needs to offer the second more money, or the first can go ahead and foreclose and incur the tremendous costs involved with the foreclosure. The other side of this argument is that the second lender gets nothing if there is a foreclosure. It sometimes becomes a “game of chicken” between the two lenders. If nothing else, expect that a short sale with two or more lenders may take a longer time for both approvals.
Please contact me if you have any questions.
William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBlaw.com
http://www.tgblaw.com/
http://www.tgblaw.blogspot.com/
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