I would focus on doing a short sale. I would keep reducing the price by $5000 until you get an offer. The worst thing that can happen is the mortgage insurer and bank reject the offer. But that way you would of done everything you could co.

To answer you question about mortgage insurance, the insurance purpose is to protect the lender if there is a default on the loan, so the loss will be smaller to the bank. So PMI does not really help you but limits the loss to the bank.

Sorry for your situation but all you can do is reduce the price to a point that gets people interested. Make sure you agent has delt with short sales because it is different than a normal sale. The first thing you have to have is a offer to start the process. Do what every you can to get the offer!

Good Luck!

Tracy,
You and your agent need to talk to the bank and tell them it is time for a price reductiond- Realtor should be able to show stats on what has sold, in what amount of time. The difference in what is owed and what it sells for used to be taxable income of yours, if it was forgiven by the bank- that was slated to be changed in some of the new laws this year.
I agree with the previous posts- you need a price reduction to make the buyers interested in your house.

Krisan in KC

Each state is different so you need to check the foreclosure laws for your state. Yes, you need to keep dropping the price until you get an offer. Then you can take that offer to the bank. You can stay in your house until the actual foreclosure. Then you will be contacted by someone about vacating. Many lenders want you to leave the house intact and as long as you stay the lawns are watered and mowed and if they get the house back it is in better shape than if you had abandoned it, so they are money ahead by having you stay throughout the whole process. .

How about a price reduction? Has your realtor talked to the bank and see if they would accept less and allow for the reduction?

We have the house listed with a realtor. We owe $108.000 on the house. The bank suggested we list the house at 99,000. It has been at 99, 000 since Janurary. What happens to the difference in what we owe and what we get?

Where is your home exactly? There's no reason for not being able to do a short sale. You simply just need to keep dropping the price until it becomes attractive to a buyer.

Tracy,

Have you hired a realtor to do a short sale? Banks typically do not want to do a foreclosure and more inclined to do a short sale. How much is owed on the home? And what was the list price of the short sale? Any offers?

Give us some more info please.

-Sean Dawes