I have some sellers in a unique situation and I realize that much of my question falls on the BK question which I'm researching - but I wanted to throw it out there for opinions, feedback and advice.

House is worth 250K - notice of default filed in Aug - no sale date set.


Sellers did a BK 3 years ago that was discharged in 2010 - of which the 2nd on the property ($140K) was discharged and they were told they were not personally responsible for it. The re-affirmed their 1st (170K) and have a small 3rd (20K).
Fast forward to today - they are still having hardships and haven't paid 1st since April. There are 3 liens on property - 1st, 2nd and 3rd. Question is on the 2nd - they were personally released from liability thru the BK,  however there is still a lien on property that will need to be released. (which I understand is quite common and possible)
If the 2nd was not on property - they could sell property at market value and have small equity left. However if they short sale it, we can make the 1st whole, negotiate with 2nd and 3rd - BUT could they negotiate with 2nd or 3rd and possibly still walk away with money? I know on short sales you are not supposed to - however this 2nd is the kicker - it was dismissed in BK - but still a lien. 

Of course to add more twists, they were actually hoping for at the very least a relocation package of 3K. 

Can the 2nd allow a relocation package as part of release? 1st won't care, they will get paid.

Anyone encountered something like this? Would love some feedback on how others would handle it.

Thank you

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The BK will essentially have no effect on the short sale, you and the lenders will proceed as normal.  I would think with only the 2nd and 3rd being shorted, there is no relo money.

Ok - that is what I was thinking too - unfortunately.  But what do you mean by a NP program available in the state, I'm not aware of any.

That is awesome - however I've never heard of a program like that for Idaho and I'm busy searching now. Thank you for info - I'll keep looking for something for them.

Thank you so much for your feedback!

Yes, it was a Chapter 7 they did.

I will have to check out if they are part of that program - the 2nd lien is with HFC I believe.

They are torn between attempting a short sale or just letting it foreclose and hoping to get cash for keys since they need the relocation money. Yet they really don't want foreclosure either.

So really  - only hope is getting 2nd to allow a small relocation package - would you agree?

THANK YOU! Very appreciated!

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