BiggerPockets

I'm just looking for a little bit of clarity from the experienced... I'm a bit confused on how to handle a short sale that has 2 mortgages. I'll give na example: John Doe has a house that has a first mortgage of 200k and a second of 50k.

1. Who do I contact regarding the short sale? And if it's both, which one do I contact first?

2. I imagine the second is much more willing to play ball considering they have the most to lose, correct?

3. The short sale package gets delivered to whom?

This may be a stupid question....just need a little bit of clarity.

Justin has your covered Brett.
No more to add.

Wow...awesome reply. Thanks for the help!

Hi, has anyone had a private second holder move in on the short sale to protect their interest?

Regarding the question about seconds protecting their interest, I have two real life examples.

I know somebody who specializes in purchasing second-position NPN. He will purchase those at a discount of course, and he has various exit strategies. And he will often get requests to short his second position. Typically, he gets more from the short than what he paid in the first place. But he will always ask for more to see how much he can squeeze out!

At the December 2009 sheriff sale that I attended, one property that initially caught my eye turned out to have a significant second thus making it a non-buy for me if the second were to bid. There was an attorney present to bid for that second lien, so I just kept quiet, and that attorney got the house on behalf of that second. In the November 2009 sheriff sale that I also attended, a house (belonging to the selling agent that I bought my present residence from) was for sale. Also had a big second; in fact the second and first were almost the same dollar amount liens. For this particular house, the second did not bother to bid.

Just a few real life examples of how a second behaves - and it could go either way.