I have to be cash poor in order to qualify for a short sale.
Having cash in the bank that you use to live on will not keep you from being able to successfully short sell your home.
I can’t do a short sale because I do not live in the property and rent it out to a tenant.
Your lender may agree to a short sale on your investment property. Maybe you cannot afford the repairs that are needed to be able to rent the property. Perhaps the rent you receive does not cover your mortgage and upkeep expenses and you cannot afford to pay the difference. Or maybe you are unable to find a tenant who is willing to pay rent that sufficiently covers mortgage and expenses.
I can just get my listing agent realtor to negotiate with my lender.
Most agents do not have the knowledge, skill, or experience to effectively handle short sale negotiations.
* Remember that only an attorney who is licensed by the Arizona State Bar is legally permitted to give you legal advice, act on your behalf, or draft legal documents.
I won’t be able to do a short sale on my property because I have a second mortgage.
The lender with whom you have a second loan will actually fare better with a short sale rather than a foreclosure. If the property goes to trustee’s sale, the second lien holder gets wiped out.
I can’t do a short sale on my property because it needs repairs.
Repairs and problems stemming from deferred maintenance can be reflected in the sales price. As long as the pricing is fair, buyers in today’s market are willing to consider properties that require work to be done.
I’ll just walk away and let the bank foreclose
If you did a cash-out refinance or HELOC you may be liable for the debt. In other words, the lender may sue you to recover for the debt.
Even if you don’t have a second recourse mortgage, you may be ineligible for a Fannie Mae mortgage as a consequence of walking away.
In 2010, Fannie Mae announced policy changes that discourage borrowers from walking away. The policy states that certain borrowers who walk away will be ineligible for Fannie Mae mortgages for a period of 7 years after the foreclosure date. Those who will be ineligible include those borrowers who defaulted and walked from their mortgages while having the ability to pay or those who failed to complete a workout alternative in good faith.