2nd mortgage in a short sale
I'm getting ready to start a short sale package. The owner has a first mortgage of 344K (including back payments, lawyer fees, etc) and a second HELOC of 135K. House was appraised in September of last year for 620K. House has been listed with a realtor for 550K, then reduced to 525K. The realtor, however, has not tried for a short sale.
What happens to a second mortgage on a short sale? Is this usually wiped out or does a whole different foreclosure take place?
Thanks