If I had a short sale and my second mortgagee is trying to make me pay the remaining balance, is there a way to settle?

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If I had a short sale and my second mortgagee is trying to make me pay the remaining balance, is there a way to settle?

The home was purchased with an 80/20 loan joint account. We split up and did short sale. The amount of my2nd loan was is 77k and it settled for 30k, 0% payments. Is there a way it can be brought down even lower for a cash offer?

Asked on May 11, 2011 under Real Estate Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If the second lender had agreed to accept the proceeds of the short sale (i.e. it's share) as payment in full of your obligation, it has to honor that agreement. Similarly, any agreement it entered into with you must be honored, so long as you honor your terms. However, if it did not so agree, it may seek to recover the additional money from you; thus, while you can hold the lender to the terms of its agreement, you cannot compel it to accept less than it has agreed to.

As to whether you can bring the amount down lower with a cash offer--you can certainly propose this to the lender, and it may agree. However, any agreement is voluntary on their part; you cannot make them accept less with a cash offer.


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