Short Sales are difficult, at best, but a new tactic has appeared on the scene that may make them nearly impossible. Apparently, the second lien holders are demanding “special” consideration before approving their part of the short sale.
Both lenders must approve a short sale, but second lenders often get the least money in the deal under the terms of a typical mortgage contract.
In recent months, second lenders have begun to demand extra money in a side deal to get them to approve the short sale. And some don’t want the seller to tell their first lender anything about it, real estate agents say —- a condition that may constitute mortgage fraud by violating state and federal disclosure requirements.