It seems that we have now been in a solid four (4) year period of short sales. Distressed sales haven’t disappeared. However, the climate has been transformed. Whereas a few years ago, the typical seller in a distressed (short sale) situation had either lost their job or was stuck in a mortgage product that was creating a financial nightmare. Now, the typical seller may be an individual that was rode out the storm for as long as they can. Their life circumstances have perhaps changed (ie. being married, divorced, having children, etc.) and are now realizing that the ability to sell their home on a “break even” is still not attainable.
Most people may not realize that if you want to sell your home, and the market will allow you to pay off your primary mortgage, and you have a second mortgage which is what is creating the “under water” circumstances, there is a solution. It may be possible to negotiate a settlement with the secondary lender. It isn’t the same as having to settle with a primary lender, and is many ways much easier. Not all second lenders function the same and some are more difficult than others. However, there may be a willingness to work with a seller that has a good offer on the table that will allow the a decent payoff albeit not a full payoff. Sellers that are considering unburdening themselves of a home should examine the financial and personal impact of keeping a home that may be costing them money, versus trying to settle the debt on a secondary, or even in some instances, a primary loan.
