I Have Multiple Mortgages: Is a Short Sale Harder To Do?

More than 1 MortgageIn many cases, it can involve more work to successfully negotiate a short sale if there are multiple lienholders.  However, not all short sales involving multiple lienholders are difficult.


There are multiple factors to a short sale.  Some lenders are more challenging to negotiate with than others.  It may be much harder to negotiate a short sale with just one lienholder if that lender is disorganized, unreasonable, bureaucratic, or overwhelmed.  If there are multiple cooperative lienholders, a short sale may be easier to pull off than if there is one, difficult lienholder.


There are other critical factors that affect a short sale.  One is the seller’s willingness to cooperate.  Lenders often ask for updated paperwork.  A seller who is organized and responsive makes it more likely to obtain a short sale approval than a seller who is slow to submit paperwork.  Another factor is the strength of the contract between the buyer and the seller.  If a buyer offers a reasonable price and is flexible, that increases the likelihood of the short sale being successful.


The lender’s policies factor into the potential for success.  If the lender permits a seller assist, that increases the size of the pool of potential buyers.  If the lender’s staff is not overwhelmed, they can respond more quickly to the parties.  As a matter of policy, some secondary lienholders will give in if the first mortgage approves a short sale, so the focus has to be placed on the negotiation with the first mortgage.  Some federal short sale programs mandate what the second mortgage can receive, which could make a short sale more likely to be approved by all parties.


The bottom line is that having more than one mortgage does not necessarily make the short sale less likely to be approved.  The other factors play a huge role in the outcome.

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