Posted by JT-IN on June 05, 2007 at 05:19:24:
I doubt that they are just shaking you down here. Many lenders use outside, third party insurers for these Jr positions. Ask them who the insurer is…? Also, in light of current market conditions in many parts of the country, many times these insurers are willing to make a settlement in advance of a foreclosure sale. Aka “throwing in the policy”, which means if the maximum claim could be 20K, they agree to pay the 20K in advance, and then let the lender dispose of the asset however they see fit. This is your only out here.