[pepsi]

[quote=SK in CV][quote=pepsi]That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re%5B/quote%5D

That’s kind of right and wrong. If the foreclosure action is done by a senior lien holder and junior lien holders are wiped out, then the junior lien holder(s) have not exhaused their remedies, they can still turn the debt over to collection and/or litigate. But if it is the junior lien holder that forecloses, then they have no remedy after the auction, they’re finished.

That’s why 2nd lien holders often have some extra weight to throw around during short sale negotiations. Even if they have no equity, they can extort some amount in exchange for walking away. It’s in the best interest of both the borrower and the senior lien holder for them to agree if it avoids a trustee sale. Even if it is paid by a senior lien holder.[/quote]

Yes, that is correct, and that is why most of 2nd lien holders do not foreclose if the house is severely underwater.

I was just assuming that the 2nd was not the one that foreclosed. Was that the case ? There is less than 5% of NOT that are filed by 2nd.

When a lender forecloses, they kind of consume their legal right for their loan to accept whatever they can get from the auction.

[pepsi]

[quote=SK in CV][quote=pepsi]That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re%5B/quote%5D

That’s kind of right and wrong. If the foreclosure action is done by a senior lien holder and junior lien holders are wiped out, then the junior lien holder(s) have not exhaused their remedies, they can still turn the debt over to collection and/or litigate. But if it is the junior lien holder that forecloses, then they have no remedy after the auction, they’re finished.

That’s why 2nd lien holders often have some extra weight to throw around during short sale negotiations. Even if they have no equity, they can extort some amount in exchange for walking away. It’s in the best interest of both the borrower and the senior lien holder for them to agree if it avoids a trustee sale. Even if it is paid by a senior lien holder.[/quote]

Yes, that is correct, and that is why most of 2nd lien holders do not foreclose if the house is severely underwater.

I was just assuming that the 2nd was not the one that foreclosed. Was that the case ? There is less than 5% of NOT that are filed by 2nd.

When a lender forecloses, they kind of consume their legal right for their loan to accept whatever they can get from the auction.

[pepsi]

[quote=SK in CV][quote=pepsi]That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re%5B/quote%5D

That’s kind of right and wrong. If the foreclosure action is done by a senior lien holder and junior lien holders are wiped out, then the junior lien holder(s) have not exhaused their remedies, they can still turn the debt over to collection and/or litigate. But if it is the junior lien holder that forecloses, then they have no remedy after the auction, they’re finished.

That’s why 2nd lien holders often have some extra weight to throw around during short sale negotiations. Even if they have no equity, they can extort some amount in exchange for walking away. It’s in the best interest of both the borrower and the senior lien holder for them to agree if it avoids a trustee sale. Even if it is paid by a senior lien holder.[/quote]

Yes, that is correct, and that is why most of 2nd lien holders do not foreclose if the house is severely underwater.

I was just assuming that the 2nd was not the one that foreclosed. Was that the case ? There is less than 5% of NOT that are filed by 2nd.

When a lender forecloses, they kind of consume their legal right for their loan to accept whatever they can get from the auction.

[pepsi]

[quote=SK in CV][quote=pepsi]That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re%5B/quote%5D

That’s kind of right and wrong. If the foreclosure action is done by a senior lien holder and junior lien holders are wiped out, then the junior lien holder(s) have not exhaused their remedies, they can still turn the debt over to collection and/or litigate. But if it is the junior lien holder that forecloses, then they have no remedy after the auction, they’re finished.

That’s why 2nd lien holders often have some extra weight to throw around during short sale negotiations. Even if they have no equity, they can extort some amount in exchange for walking away. It’s in the best interest of both the borrower and the senior lien holder for them to agree if it avoids a trustee sale. Even if it is paid by a senior lien holder.[/quote]

Yes, that is correct, and that is why most of 2nd lien holders do not foreclose if the house is severely underwater.

I was just assuming that the 2nd was not the one that foreclosed. Was that the case ? There is less than 5% of NOT that are filed by 2nd.

When a lender forecloses, they kind of consume their legal right for their loan to accept whatever they can get from the auction.

[pepsi]

[quote=SK in CV][quote=pepsi]That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re%5B/quote%5D

That’s kind of right and wrong. If the foreclosure action is done by a senior lien holder and junior lien holders are wiped out, then the junior lien holder(s) have not exhaused their remedies, they can still turn the debt over to collection and/or litigate. But if it is the junior lien holder that forecloses, then they have no remedy after the auction, they’re finished.

That’s why 2nd lien holders often have some extra weight to throw around during short sale negotiations. Even if they have no equity, they can extort some amount in exchange for walking away. It’s in the best interest of both the borrower and the senior lien holder for them to agree if it avoids a trustee sale. Even if it is paid by a senior lien holder.[/quote]

Yes, that is correct, and that is why most of 2nd lien holders do not foreclose if the house is severely underwater.

I was just assuming that the 2nd was not the one that foreclosed. Was that the case ? There is less than 5% of NOT that are filed by 2nd.

When a lender forecloses, they kind of consume their legal right for their loan to accept whatever they can get from the auction.

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

That is not true that there is no recourse after the auction. The 2nd lien holder get wiped out FOR THE BUYER. They can still pursue the seller for the deficiency in the court.

Google “2nd lien holder pursue recourse” and you will see many lenders are doing it. Especially for large amount.

Here is an article specifically talking about the 2nd lien holder with recourse loan:

http://www.trulia.com/blog/hannah_fliegel/2009/05/non-recourse_loans_vs_re

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[pepsi]

[quote=socrattt]
but I recently heard of a situation where the 2nd wanted nothing to do with the short sale because they found the buyer already had another mortgage he was current on. The property ended up going through the foreclosure process and after looking at the numbers the 2nd didn’t make a dime.[/quote]

If you are the 2nd lien holder, would you agree on a short sale that give you 10 cent (or even 1 cent) on a dollar or would you go after the seller for the full amount after the auction ?

There are a lot of 2nd liens in 100-200K for lower end and 300K – 500K for the higher mid end.
With that much of money at stake and knowing they are keeping current on that mortgage, the 2nd lien holder has good chance to get most of their money back, even after attorney fees and other charges. It is unlikely this guy will declare BK to wipe out the recourse 2nd.

Since the seller has 2nd home (mortgage), they probably put enough (20% or more) money to get the loan these days. And that is the money the 2nd can go after.

Why would you agree to a deal that you are absolutely going to lose a lot of money ?

Put yourself into their shoes, and you know why.

[Author]

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