Oh, and BTW, I had to pay the outstanding bills out of the money that we got, so without the reno, they really would have gotten soooo much less because there were extensive medical bills. 

Currently, the property is listed for $1 million (an amount below the outstanding amount due).  

You are only paying interest on the outstanding balance and you can reuse the credit line over and over. 

There is no outstanding debt they owe me.

I know with mine the payment is considerably higher because it is a percent if the outstanding balance instead of amortized over 30 years.

I suggest you don't buy a property for $75K with an outstanding $95K lien without a plan.

Servicing includes the receipt of any money from a mortgagor that is applied to the outstanding obligation.

So, for short sales, just offer what you're willing to pay (actually, offer 10% less, so you have some negotiating room when the bank counters).As for private transactions, the more information you have about the seller, the property, any outstanding loans, etc, the better negotiating position you're in.

These prepayment penalties did not kick in if you did not exceed 20% of the outstanding loan balance.

Obviously the rates and terms are better for you but the portfolio lender only makes money when the loan is outstanding and if they think you are only using them as a hard money substitute (a much cheaper substitute) as a bridge to conventional financing they will not want to do the work it takes to find the loan for such a short time.