How common is a second mortgage?
About 35% of our short sales have a second mortgage or HELOC. The holder can be anyone, and sometimes it is the same lender as the first. Now and then a homeowner has kept the second current while falling behind on the first.
Why does the second lender matter?
The first lender approves the sale price, and only a limited amount goes to the second. The second lender has to agree to release its lien for that amount. If it will not, the sale cannot close, so we bring the second lender in early instead of waiting for the first to finish.
What about HOA dues?
When HOA dues are delinquent, they have to be brought current at closing. The lender will not let the HOA collect everything it asks for, so the HOA's payoff often has to be negotiated as well.
What slows lien approvals down?
- Missing or late documents from the homeowner
- A second lien holder that is slow to respond
- The investor that owns the first loan, which sets the rules the servicer has to follow
- Payoff figures that change while the file is under review
In our experience, what most often slows or sinks an approval is not the servicer but the investor behind the loan.
Last updated October 15, 2026 by Constance Boyce, REALTOR®, SFR®. General information, not legal or tax advice. We do not solicit properties listed with another agent.