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JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience:  Attorney in the practice of Bankruptcy Law since 1996
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Hello Joseph, Heres a continuation of our same case that

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Hello Joseph,

Here's a continuation of our same case that you answered on before:

By claiming there was no equity for the creditors, our first mortgage holder got the court to remove our home from the bankruptcy estate and initiated foreclosure. (We had already surrendered the home but had a $20,000 homestead credit filed in the case.) Note: Assessed value presented to court was $178,000 but was now reassessed by the county at $222,700.

We have a young couple interested in submiting a short sale offer to the first mortgage holder willing to add a provision to deed a 2 acre parcel (already surveyed off 2 years ago) to us, which is equivalent in value to our homestead credit.

Is this even possible considering that there’s a 2nd mortgage holder with a lien? The offer they plan to submit is very close to the amount the first mortgage holder needs to completely satisfy the debt but not enough to pay anything to the 2nd mortgage holder who has already written the debt off.

Question: " Is this sale even possible considering that there’s a 2nd mortgage holder with a lien?"

Answer: Unfortunately it depends on the second mortgage holder, who are often not particularly easy to work with. They don't have to release their mortgage at all, so it is a negotiation process. You may be able to get the second mortgage lender to go along with it if they can transfer all or part of their mortgage to the 2 acres, or if you can make some cash settlement to them.

Of course you can try to just get them to release it for free as an initial goal, but I would anticipate you will have to throw them a bone to get them to actually do it.


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