Why would any bank in today's market allow a co-borrower off of a loan? Isn't it better to be able to pursue two debtors than one, in case of default? Especially, on a home with negative equity. Think about it.. .... Happy funding, Rudi
When we do short sale listings in my office, we do a complete financial analysis on our clients to see if they would be a better fit for a modification or a short sale, not to mention our clients wants and needs in regards to their home ownership future. Bottom line, I would decide in all certainty which route you want to take; 1.) Modification - keep the home and hopefully lower payments and loan balance or 2.) Short sale - Sell the home and be free of the debt with a large (but not HUGE) hit to your credit. If you've been thinking about a short sale, just know that they can be a little complicated and potentially time consuming. There needs to be extenuating circumstances for a bank to approve the sale. These can be things like losing a job, less income, major medical issues, etc. Just not wanting to pay is typically not a good enough reason.
Hope that helps, feel free to let me know if you have any more questions. And good luck! There are ways out of your situation!
If both of wish to spend $125,000 each to satisfy your needs, good luck. Or, maybe, both of you would rather go into foreclosure and then file Bk's. You have options. Again, IMHO, I would leave matters, as is.