Hello everyone.

does anyone have experience in dealing with a short sale that has 2 liens and 2nd lien was filed for BK? The homeowner said he has only one lender and later i found out that he filed a Bk on the 2nd. Can anyone help me how to work this and get short sale approve? Thank you.

Has the bankruptcy been discharged? Second mortgages are usually a pain when it comes to short sales. You first have to find out if the second was a HELOC or were the proceeds used as purchase money funds. You will need to obtain a 3rd Party Authorization from the seller for each mortgage company involved and then contact them and have them tell you what the process should be. If the bankruptcy is an open Chapter 13 you are going to be DOA. If it a discharged Chapter 7 you are in the best position because now the second cannot get a judgement on a discharged debt. Anything they get from the proceeds of a short sale would be found money.

thank you so much hometeamGA. by the way, what is DOA? they filed chapter 13 on it. I belive it has been discharched and worked out a payment plan or something. Is this short sale possible to get through? what needs to be done in this case?

You need to know if the bankruptcy has been discharged. If they are in an open Chapter 13 then nothing can be done without the permission of the court. (DOA means dead on arrival)As long as a mortgage (1st or 2nd) is involved in an open bankruptcy, they are not going to talk to you. If it is discharged then you proceed with the process just like the BK never happened. If the second was paid through a Chapter 13 that is now discharged, you will still have to get a lein release from the second before the home can be sold. It is possible that the 2nd was not paid in full by the trustee and there may be an outstanding deficiency. You also need to find out if the short sale on the 1st would be a H.A.F.A. approved short sale. If it is then the amount of money that would be paid to the 2nd is regulated by law. The 3rd Party Authorization will allow you to find all of this out.