As kids we often got into confrontations where there was two against you or two-against- one and we would complain like children do that two against one was not fair. So now we’re grown ups and we’ve come to understand that at times life isn’t fair so we learn to work through the two-against-one situations as best as we can.
Take the situation of two-against-one in a foreclosure scenario. The homeowner facing a foreclosure has two mortgages on his or her home. The holder of the first mortgage is threatening foreclosure and the holder of the second mortgage is saying that if the first forecloses, then he or she will sue you for breach of contract. You’re getting it from two sides. So to avoid problems that can be presented by the holder of the second mortgage you want to come up with a way to get him to walk away with a promise that he or she won’t hassle you. How do you do that?
You can offer the holder of the second loan some cash as a settlement and in return get him or her to agree to cancel the loan. It just might be possible for you to get an agreement if the lender thinks the offer is the best he can get. But, if he or she agrees to it, make certain that it’s all in writing to assure that he or she can’t go after you later. Also get the lender to notify the credit organizations that a settlement has been agreed to. This will save your credit. If the second mortgage lender does not agree to a cash payment, then see if he or she will go for a note promising to pay a part of the loan over time. In return the lender settles the loan.
Now you are free to work things out with the holder of the first mortgage to get him to go with a short sale rather than a foreclosure and you’ve prevented any possibility of the second lender or a third party from hassling you for more money. If the holder of the first mortgage goes for the short sale, then you’ve basically salvaged your credit situation and you will be able to buy another house in fairly short order.
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