We have access to both portfolio lenders and hard money lenders that would be willing to review your loan package. If you have not found a suitable lender, feel free to contact me and we can begin the process.
The advice given here could not be more wrong. Short Sale vs Foreclosure with respect to credit: With a foreclosure on your record, there is a court filing (public record) which could follow you for many more years than a short sale would. Secondly, it is documented, homeowners that have successfully completed a short sale have been approved for a home loan just after 3 years. Though, it is much more likely to be 4 years. The same cannot be said for foreclosure.
Deed in Lieu is the same as foreclosure from a credit perspective and a tax liability perspective. If done incorrectly, you could also have to pay back the balance (outstanding loan amount + expenses less what the property is sold for) in the form of a promissory note. Even a deed in lieu is part of the written record because you will transfer ownership via a quitclaim deed.
Lastly, doing a deed in lieu with a lender these days is not that easy. I have experience where the bank would not accept a deed in lieu and foreclosed anyway. Why? Because they are inundated with loan modifications, short sales, and other foreclosures. They farm the foreclosure processing to attorneys and the courts and so is easier for some lenders to let the foreclosure happen.
A short sale affords you an opportunity to add contingencies to a sales designed to help protect your interests. You can ask for deficiency waivers (if needed), protection from future collection claims or promissory notes, and you may even ask for the lender to report the loan as satisfied to the credit bureaus. Foreclosure and deed in lieu does not allow you this option.
One of the pieces of advice below that makes sense is refinance. If your not already in default on either of your properties, you should be actively seeking a refi or a loan modification on your primary. You will not likely lose your primary if the bank forecloses on your investment property. So, get your primary squared away first.
Next, after your primary is squared away, learn all you can about properly doing a short sale. Avoid agents that cannot show you a list of at least a dozen or so succesful short sale closings. Consider consulting an experienced short sale negotiator. Good Luck!... more