Has anyone dealt with this lender? Why would any 2nd lender sacrifice receiving $0 due to a foreclosure, than what the 1st has offered.


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I've dealt with them. Some lenders opt to take their chances to recoup funds at foreclosure than taking a 1st liens proposed payoff; Or it may be a hardball tactic to attempt to recoup more funds from contributions or other methods.

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Brett, Thank you!


I would say that a reason why you might find a second mortgage might seemingly rather get $0 but there are many benefits to going this route. A Franklin Credit Management Corp Short Sale is tough. The company through various means, will likely benefit in the foreclosure process. 

Lender's Areas To Benefit From Foreclosure (not limited to):

  • Non-Deficiency - If a bank accepts a short sale in some state that requires them to waive their deficiency, If that is the case often pursuing the homeowner afterwards is an option.
  • Tax Write Off - They take the loss and write it off on their books.
  • Auction Proceeds - If the home is foreclosed on and there are additional proceeds the trustee will typically file an Interpleader at which time the second could get more money. Brett pointed this out below.

Often there are other various reasons that the second mortgage lender may be willing to let it go but if you can show them they will make more money working with you than letting it go that is where the mastery of our business comes in. Negotiating the un-negotiable. 


Jonathan Katz

Absolute Consultant Group



Thank you for the detailed information! It definitely helps. 



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