How can I compel the bank to close 2nd mortgage after the short sale has been approved

If Chase agreed in writiing to accept a specific amount on the second mortgage (usually by means of a payoff statement) with a "good-through date" and if they received that amount in cash, cashier's check or attorneys' trust account check on or before the "good through date" they are obligated by Florida law to satisfy the mortgage. This is called an "estoppel statement" in Florida law. So, if those are the facts, they don't have a choice, and if they are failing or refusing to do it, they can be compelled to do it.

However, if the short sale went forward without an estoppel statement on both mortgages, or if payment in accordance with the estoppel statements was not received in the required form by the "good through date", the problems is not with Chase, but with the closing agent. Chase is probably now just the servicer of the loans, not the owner. That is the norm these days. And if that is the case, the underlying owners of the two mortgages are two different entities, who no doubt have different rules and policies governing how they will handle short sales.

Unfortunately, when people set out to do short sales, they tend to overlook second mortgages.

The first thing to understand is whether there was an estoppel statement on the second mortgage, and if so, whether payment in the required form was received at the address provided on the estoppel statement by the good through date. If so, you should constact a consumer financial services litigation attorney about forcing the issue with them. If not, it is likely there is a problem with the closing agent.

F.S. 701.04 fprovides "Cancellation of mortgages, liens, and judgments.--

(1) Within 14 days after receipt of the written request of a mortgagor, the holder of a mortgage shall deliver to the mortgagor at a place designated in the written request an estoppel letter setting forth the unpaid balance of the loan secured by the mortgage, including principal, interest, and any other charges properly due under or secured by the mortgage and interest on a per-day basis for the unpaid balance. Whenever the amount of money due on any mortgage, lien, or judgment shall be fully paid to the person or party entitled to the payment thereof, the mortgagee, creditor, or assignee, or the attorney of record in the case of a judgment, to whom such payment shall have been made, shall execute in writing an instrument acknowledging satisfaction of said mortgage, lien, or judgment and have the same acknowledged, or proven, and duly entered of record in the book provided by law for such purposes in the proper county. Within 60 days of the date of receipt of the full payment of the mortgage, lien, or judgment, the person required to acknowledge satisfaction of the mortgage, lien, or judgment shall send or cause to be sent the recorded satisfaction to the person who has made the full payment. In the case of a civil action arising out of the provisions of this section, the prevailing party shall be entitled to attorney's fees and costs."

The National Association of Consumer Advocates (NACA) is a non-profit consumer advocacy organization. NACA maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. Please look there for someone in your area who specializes in consumer financial services litigation to review the details with you and advise you.

What can I do to get them to show the 2nd mortgage as closed? You first want to verify that the 2nd has not been satisfied. If not, was the payoff agreement made in writing? I think you may have an action for beach of contract against the lender on the 2nd.

The dismissal without prejudice may not be an issue right now. It means that they can still file another foreclosure action later. The most important question right now is, "Were the terms of the Short Sale provided in writing?"

Negotiating a short sale when you have more than one mrotgage is tricky. There is no way to finalize it without the cooperation of both. You need the services of someone who is knowledgable in getting this done. If your property is worth less than the amount of the first mortgage, the holder of the second has very little leverage, and if the holder of the first does foreclose, that would extinguish the second. If the short sale does get approved by both mortgagees and does get done, the dismissal without prejudice would become irrelevant. However, the holder of the first is not going to dismiss with prejudice at this stage, because if the short sale is not concluded, they will want to be able to start a new foreclosure.

The National Association of Consumer Advocates (NACA) maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. If you don't already have an attorney, please look there for someone in your area who can help you.

When negotiating a short sale for a property which stands as security for two loans, you must make certain that both lenders agree to accept the terms of the short sale and to cancel the loans that the property secures. It is confusing to me whether you were represented by an attorney in this transation. If so your question should be put to that attorney. If you were not represented, you need to review all the documents that were signed in the transaction by the lenders to determine if the holder of the second agreed that accepting less than the full amount owed would satisfy the debt. If you were represented by a real estate broker in the transaction you should ask the broker for evidence of any communications the broker may have had with the attorney or lenders concerning your second. Sounds to me like someone dropped the ball here and did not make sure your expectations were fully met.