How to get your short sale approved even if you have more than one lender.

If there is a first and a second mortgage /home equity line of credit, the negotiations of a short sale are a little bit harder and take a little bit more time.

In addition, you may also need approval from the investor that holds the loan if the loan has been securitized / sold to a third party investor.

The presence of two lenders can make a short sale more complicated since it’s often the second/junior lender that has to absorb most of the loss.

Usually the second/junior lender receives up to 10% of their note / original loan amount from the first mortgage holder. Sometimes the second loan / mortgage holder does not agree with that. If this situation arises further negotiation will be necessary in order to make all parties satisfied.

Another thing to consider is that you may receive an approval from one lender and still have to wait for the other lender approval. In that case two things can happen: either you get the approval from the second lender in time for the buyer to close or the first lender approval expires and then an approval date extension is needed either for one or both lenders.

Although response times vary from lender to lender, it can take as long as 30 -60 or even 120 days to receive an approval of a short sale from a lender.

If you are facing foreclosure and need assistance with your short sale click here

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