Hi everyone!

Wondering if someone can help.  I have a file that was approved and juuuuust about ready to close when the title company decided it might be a good time to pull title work (which they say they always do when I provide them the listing paperwork).  Anyway, an IDOT (Indemnity Deed of Trust) showed up on the title work.  I had not experienced that before but I guess it is a cross collateral type of loan.  So now, they are in 1st position and the previous negotiations between the first and the second were all for naught.  The IDOT holder wants all of the money but the first mortgage wants to keep it and now nothing at all goes to the 2nd mortgage. 

Anyone deal with such a thing? Any tips? Oh and by the way, this seller went bankrupt in the middle of the process, but we got permission to continue with the short sale.

Thanks for any insight and guidance!

Diane