Tough bargaining by second-lien holders is delaying deals
and killing some short sales, even as banks embrace the practice
to avoid costly foreclosures and help clear the market of homes
that are worth less than the loans on them, said Vicki Been, a
New York University law professor who has studied mortgages.
The right to collect on unpaid junior liens varies with
state laws and type of loan. In 39 states, including Florida and
New York, lenders may seek deficiency judgments, giving them
recourse to pursue borrowers for unpaid mortgage balances.
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