what happens to second liens in short sale

[NotFun]

If you do a short sale on your home, what happens if there's multiple liens on the property?

Do you have to get a short sale approval from all lenders?

[HHM]

Yes, you have to get approval from ALL lien holders in a short sale.

Reason being, you cannot pass clear title to the buyer unless all lien holders release their lien.

See this post

http://www.bkforum.com/showthread.php?t=17098

[31trick]

My house is also on short sale and my second lender wants me to sign a promissory note for 10k for them to approve the short sale. I am also planning to file for BK soon. My question is, if i file for BK, can i include the 10k that i signed with my second lender? Please advise, if I dont sign the note i am heading to foreclosure.
I just joined in and so glad to find this site.

[HHM]

My house is also on short sale and my second lender wants me to sign a promissory note for 10k for them to approve the short sale. I am also planning to file for BK soon. My question is, if i file for BK, can i include the 10k that i signed with my second lender? Please advise, if I dont sign the note i am heading to foreclosure.
I just joined in and so glad to find this site.

You are already planning on filing BK, so you would sign a personal guarantee for loan that you already want to include in a BK...if that is not the perfect definition of fraud, I don't know what else is?

[CindyLou]

if you are filing for BK then why bother with the whole short sale process anyway? Why not just stay in the house rent free through the foreclosure process (which will be slowed a little by the bk)?

[31trick]

i thought that too, am just so confused. Iam filing Bk due to my medical bills and I was hoping I can cut it down to a manageable amount. Am still doing my best to avoid filing BK but I guess I can't. Thanks for you input... thanks for this site.

[NotFun]

if you are filing for BK then why bother with the whole short sale process anyway? Why not just stay in the house rent free through the foreclosure process (which will be slowed a little by the bk)?

That's correct, but what if your not filing BK? I have a family member that might have to short sale, and a BK is way to much for them.

[RickInMich]

My house is also on short sale and my second lender wants me to sign a promissory note for 10k for them to approve the short sale. I am also planning to file for BK soon. My question is, if i file for BK, can i include the 10k that i signed with my second lender? Please advise, if I dont sign the note i am heading to foreclosure.
I just joined in and so glad to find this site.

Hey, 31trick, what is the amount of your second? Is it the 10,000, or did they offer to settle for less?