Many people don't realize that if they have taken a home equity loan / line of credit (second mortgage) and they need to sell their home because of a hardship, that both the first and second mortgage banks must approve a short sale. 

In some cases, the bank holding the second mortgage are not giving approval.  If they are, they are conditional approvals which require a promissory note at closing, or a cash payment (sometimes partial, sometimes in full) at closing.  We are seeing this mostly for second mortgages which were not used as purchase money mortgage.  In other words, if you didn't use the second to buy the home, but used it to buy furniture, pay bills, buy a car, or anything else besides being part of the mortgage at time of purchase.

However, we are also seeing some of these same banks - with a little bit of persistance on our part - willing to negotiate after they have sent these conditional approvals or outright denials.  No gaurantees, but it does happen.

This is why it is so important to use an agent to help you with your short sale that is well trained and knowledgeable about your options with short sale listings.  Knowing who to call and what to say is vital in this process.

So if there is anything I can do to help, please let me know.  If you do not live in the Phoenix area, that's okay, I will gladly help you find an agent in your area that is skilled in this process. Just give me a call...

I am here to help...

Lynn Otlewski, CDPE
RE/MAX Integrity, REALTORS®
623.238.3875
lynn@ValleyREadvisor.com