Any advice on a discounted second mortgage?

[Mike O.]

Hello I am currently negotiating a discounted payoff with a second mortgage. The balance is $25,000. I offered $5,000 and the bank came back at $16,000 and said that is “pushing it” Could anyone provide any insight into negotiation with second mortgage lender? The circumstance: The owner is gone across country and hasn’t paid in over a year, they do not care about credit, repercussions or the home, owner has given me permission to speak with both banks. 1st mortgage is $118,000 , I found the vacant property driving for dollars and called the number listed on sign at house (it is not listed with agent). Number is to Ocwen, I have done some research and found they have some orders from various state’s banking divisions to cease any foreclosure activity. I plan to pay the first mortgage off, but do not want to pay the full second mortgage balance as I can get into the property for around ($118,000-first -- $5,000-second) $123,000 rehab around $20,000 and sell for $160,000>. Additionally, if I understand correctly, should the property go into foreclosure, the second mortgage would only be paid if there are any funds left after 1st mortgage payoff and that’s if someone other than bank bids over the current balance of $118,000. My thought: Present the comps, reference the fact that they are not getting paid when the property forecloses because the current fair market value is not enough to cover first and second mortgage.