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Posted by njdave on August 26, 2002 at 06:37:13:
In Reply to: Selling house w/ 1st and 2nd mortgage posted by Diane on August 25, 2002 at 19:48:52:
A short sale is a possibility... though you might be asked to repay part of the second mortgage balance via an unsecured note.
A few years ago I was asked to handle a short sale for a couple who simply wanted to move. Their mortgage loan payments were current and they enjoyed a good income. They owed more on the mortgage loan than the as-is, fair market value of the house.
Initially, I rejected the assignment because I didn't think their lender would approve a short sale. Long story short, I did agree to accept the assigment and their lender did agree to accept a short payff.
The Sellers did incur an exposure to liability for income tax... but to them, 30% of the $30,000 savings was a bargain.
