Short sale question

[Jim S]

We recently purchased a home thru a short sale. It's the first short sale we have done. We usually buy REOs.
When we were negotiating we had the most issues with the holder of the 2nd trust. They kept jerking us around asking for more $$. In retrospect, if the home had gone into foreclosure- wouldn't they have lost all of their $$ assuming it was the primary mortgage holder who filed?
How much leverage do the 2nd trust holders have?

[Scott Hubbard]

Matt brings up a good point.... It really depends on a great many factors whether a second will accept what the senior note holder will allow.

Those variables include:

Settlement Offer Amount
Recourse or non-recourse
Purchase money or non-purchase money
State foreclosure laws
Investor or lender policies
Coming off a loan modification
Borrower Financial Analysis

Just to name a few. In my opinion, there are just too many variables to have any prejudices. The best thing to do is try, then try again.

You can also attempt to handle settlement outside of closing, that can add tremendous value to a transaction.