Home seller strategy if facing potential short sale and have 2 mortgages

Are you in a situation where you may need to sell your home because you can no longer afford to pay the mortgage?

Do you have a first and second trust?

Before selling your home,find out about modifying your loan(s)if you don't want to move.

If you want to move and/or can't modify your loan, consider talking to the lender who holds your second mortgage (if you have a first and second trust) and talk about paying what you owe them.

It can take a while to hear back from a lender to approve the sale of your home when you are asking the lender to forgive the balance on your mortgage (if your proceeds from the sale won't enable you to pay off the mortgage and you are asking the lender to forgive the balance). When a seller has a first and second trust,it takes even more time because you are asking them both to accept losses, which neither wants to do.

Often the second loan is for a smaller amount of money and at a higher interest rate than the first loan. Some of the second lenders feel they should recover the entire loan or only have a minimal loss since the seller borrowed substantially less money from them. So they may hold up negotiations. Meanwhile, the first trust also wants to minimize their losses. so there is a tug of war between both lenders (it might be easier to negotiate if both loans are with the same bank,but it depends on the bank).

I am working on a contract now, where the seller engaged the second lender in conversations to pay off her loan prior to selling her home. The seller and second trust came to an agreement,so the seller is paying off the balance. We will now "only" need one lender to approve the sale. I applaud the seller for doing this and wanted to share this idea with you if you or someone you know is in a potential short sale situation and wants to increase the odds of a successful sales transacation.

As a potential seller in a short sale situation, make the best of a bad situation. In addition to making your home show well,talk to your lender and if you have a first and second mortgage,do everything you can to pay it off before selling your home. Some buyers are only interested in looking at short sales where the seller only has to get one lender to approve the purchase because they believe it will take less time for the sale to be approved and there may be more negotiating room on the buying side if only one lender has to approve the sale price and terms.

If you or somebody you know wants to talk about short sales or the market,let me know. I am here to help and am anywhere you want to be in Metro DC.

Adam
adambashein@mris.com
www.basheinhomes.info

CELL: 301-943-4370

Adam Bashein
Licensed in MD & DC
Weichert Realtors
301-718-4100
7821 Tuckerman Lane
Potomac, MD 20854