May 3, 2008
Short Sale Second Mortgage Vs. Foreclosure Second Mortgage
If a homeowner who has two mortgages on his or her property finds himself or herself facing foreclosure or a short sale, what is the best alternative?
The best way out of a problem like this is the Short Sale Second Mortgage. In a short sale, the property is sold for far less than its true value. The two lending institutions that have lien on the property will get some return of their investment and the homeowner walks away avoiding the threat of a possible law suit by the holder of the second mortgage.
If, however, the homeowner has to go through the experience of a foreclosure then he or she may also face a possible law suit for breach of contract from the holder of the second mortgage. This could occur because the holder of the second mortgage is wiped out if the holder of the first mortgage forecloses and a law suit is the only way it can gain some of its investment back.