Is the second mortgage forgiven after short sale or dil?

rocstud · Joined: 06 Jul 2008 Posts: 1 1.26 Dollars($)

I have a rental property with a first mortgage and second (line of credit) against my primary reside. In any event, DIL, short sale, am I stuck with the second or is this forgiven?

laphillips · Posted: Sun Jul 06, 2008 2:38 pm Post subject: Second mortgages?

Hi Rocstud,

You don't definitely say but it sounds like you've entered the foreclosure process, true?

The 2nd mortgage is of course in second position. In the case of a short sale, for example, the sale is subject to lender approval meaning that when the offer is made it is submitted to the lender & asked if the will accept the amount of the payoff that has been offered. They also approve the other costs such as real estate commissions. Once they are satisfied the negotiation with the 2nd lender can begin based on whatever they may or may not have left to work with.

As far as whether it will be forgiven or not is on a case by case decision.

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