Short Sale Of Property With 2nd Mortgage

Question: What happens to the 2nd mortgage holder after a short sale of a property?
We currently own a home in Lakeside, Michigan, that has a first and second mortgage. The first holder has agreed to a "short sale" What happens to the second holder? Can they put a lien on personal property in Michigan? We just don't know what to do! Thanks for your feedback.

Answer: The second mortgage holder can hold out for full payoff. Is the home value below the first and second mortgage total? Also, a second mortgage holder does have the personal promise of the owners for payment of the note that is secured by the mortgage. So the second mortgage holder could get a judgment for personal liability against the owners.

Attorney: Mark Miller

Share On:

Ask An Attorney

Corporate Attorney

Do you have legal questions?

Use our form to send your question to us and our lawyers will post the answers on our website.

Verify Miller Johnson Schroeder, PLC