Homeowners that have an underwater mortgage and are looking at their options for short selling their home are finding that oftentimes a second mortgage on their home is making the sale difficult. Second lien holders usually are the roadblock that prevents many homeowners from short selling their home and getting away from a bad situation and their underwater mortgage.
Those homeowners that have a second mortgage must work with their primary mortgage lender and secondary mortgage lender in order to make a short sale. However, many secondary mortgage lenders often stand to gain less for a short sale than the primary lender, so they often refuse to allow the sale to proceed.
Yet, there have been incentives offered by the Obama Administration that are giving both primary and secondary lenders benefits if they work with the homeowner in a short sale. Underwater mortgages have been causing more troubles these days as housing values across the nation have dropped substantially in many places.
It’s understandable that a homeowner would want to be rid of a mortgage where they owe more than their home is worth. Sometimes a lender will offer a principal reduction on a home or will allow the homeowner to refinance their home so that they can at least afford to pay their underwater mortgage, but for some homeowners they simply want to be rid of the house.
It’s still being advised that homeowners should contact their mortgage lender if they are looking at options for short selling their home. Homeowners and lenders may be able to work together to not only allow a homeowner with an underwater mortgage to sell their home but also find a new homeowner so that lenders will not lose out on the deal.