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Originally Posted by tripods68
That's a good article. That's exactly what my buddy did.
I think Short Sale would work a lot better. Short Sale only stays in your record i believe 3 years correct me if I'm wrong.
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A short sale that deals with bank forgiveness of debt only works if you are behind on your payments. We had a real estate attorney in the office on Wednesday explaining how they work. If you aren't already behind paying your mortgage you can't do a short sale unless you have the means to make up the difference - personal loan or cash.
Some banks require you to have approval before you can list your property as a short sale. There is a very long list of requirements that the bank requires from the seller for a short sale (W2s, bank records, hardships, paystubs, etc) and if they see that you have other money and a good paying, steady job they aren't going to forgive the difference between the sale price and what you owe. The other thing is that each state has tax implications. RI doesn't tax forgiving debt but some states treat it as income and you will receive a 1099 for the difference if the bank forgives it.
Moral - talk to a lawyer or a RE agent who has dealt with short sales.