I have been unable to refinance because my unit is worth much less than the balance on my mortgage. I have been denied a loan modification. I must move by this summer and do not want to make a penny on the sale. I just want to be rid of this property.
I have been advised that I would not get approved for a short sale because I do not have a financial hardship. However, I am not sure this is correct. I am seeking advice as to what my options are. –Chad, Los Angeles
If you are moving for a job transfer then, then you have a legitimate hardship. I do know this. If you move in six months and stop making the payments, then something will need to be done. The bank will either approve a short sale or foreclose on your property. You could try to rent the unit out and write a check every month to cover the payments. But, then you would be limping along for years until the market improved and you can sell.
But, what if things get worse? What if a tenant trashes your condo and you can’t afford the repair bill? No one wants to rent a trashed condo. You would have a hard time covering the payments then and even risk a foreclosure. I would start the short sale process today. There is a good chance that your lender would approve a short sale today.
If not, then you could convince them to approve it later, after you have moved. Some short sale negotiators are easy to work with and will approve the short sale. Others might play hardball and want a promissory note from you. It’s all negotiations. The sooner you start the negotiations, the sooner you can move on with your life.