Grande Mucho
I have a property Im working a short sale on. The bank is in the process of obtaining a value from one of their sources. What happens when the bank realize that they can't loose by going through with the forclosure beacause their LTV is 12% and they decide against my short sale offer? Should I consider paying what they are owned and seek a short sale from the 2nd lein holder. - NEED HELP!! 
It depends on how the numbers looks. Here is an example when you should only short sale the 2nd.
FMV = $100K
1st = $50K
2nd = $45K
You should only short sale the 2nd leinholder because the 1st will most likely be guaranteed that at the auction and will not short sale. Let us know the numbers and we'll see if we can offer some advice.
Tanya