Beneficial HSBC 2nd Mortgage Short Sale?

How is Beneficial HSBC to deal with on a 2nd mortgage short sale?

I am trying to sell a Nazareth area ranch on 1.3 acres with an FHA first mortgage with a payoff with fees of around $135,000 (principal $125,000).

The second mortgage has a balance of about $42,000 through Beneficial.

I have been getting offers of around $170,000. The house has a new septic, driveway, roof etc (it could go FHA). It needs minor cosmetics and is a great deal for the right person.

I am worried the BPO might come in too high.

How much of a loss will a 2nd mortgage holder typically take?

I have never done a short sale. Any help would be appreciated.

Beneficial was a kinda hard monel HELOC or 2nd typically. If it's performing why give up a high yielding note?

Both the 1st and 2nd mortgages are not performing. The owner has not made a payment since Sept. '07 when her husband left her in the lurch.

A sheriff sale date has not yet been set but it is in foreclosure with the FHA 1st mortgage (Countrywide).

On the Beneficial short sale package it states that the borrower is still responsible for the loan even if they remove the lien on the house so the property can be sold. If so, how does doing a short sale help the seller/borrower?

I have been trying to sell this house since July '07, starting at $229,000 then dropping to what is owed. I have a lot of interested parties but the buyers have houses to sell before they can buy. Semi-detached and rowhouses in the area sell for $130,000 to $180,000, so it is frustrating that I have yet to find a buyer for what I consider a great deal.

The only other reason this house has not sold is that it smells like male cat urine. There are hardwood floors under the carpet, but the animal smell has been an instant deal killer. The owner does not have the money to fix up the house.

How much commission will the bank allow me to take in a short sale? (I am the listing broker).

How much of a loss will Beneficial be willing to take on the second mortgage?

Beneficial may agree to release its security interest and facilitate a market value short sale... but don't be too surprised when it won't forgive the debt, or release the borrower from the responsibility of repayment via a 'soft' note for the balance.

cat pee is the worst.

I don't think there are any hard and fast numbers as to what the 2nd would take.

I would get familiar w/ how deficiency rights are handled and how the new handling of debt forgivness would impact the bank and the deal.

I always call in and float a test offer "the most we could pay for this loan would be in the 5% to 10% range, is that even in your range, considering the alternative?" and see what they need. i shorted a$43k 2nd last week (rough seller, rough house), first they said "we'll consider nothing under 30% ($13k) but I kept pushing and got it for $4000, and got them to agree to a full satisfaction with no def. judgment, they're illegal in my state anyway.

If you don't buy it and make sure it's satisfied, they can and will sell it to someone else--sometimes for 10% or more--like collectors who'll track down the debtor personally, garnish wages, etc. Just because it's off the property doens't mean it's worthless.