If your biggest issue is that the home is underwater, and you are able to make your current payments, then why don't you try to keep the property? Especially if the rent covers your mortgage, taxes and insurance.
If you are having difficulty making your mortgage payment due to an increase in payment from an adjustable rate or interest only payment; I would suggest you try to modify the loan with your mortgage company.
Even if it is not your primary residence, I would still push the lender to work with you on the basis of the increased payment and difficult financial times; however it does take a lot of persistance on your part. Keep in mind they are very busy and may be slow responding to your efforts.. "Persistance" is KEY; be polite and don't take no for an answer....
You may also want to verify you are being assessed the current market value for your property with your County tax collector. Review yor tax bill for their assessment; and request an adjustment if they are too high on their value.
I agree with the other agents on the short sale option; consult a tax professional. However, if you still want to keep the property after the loan modification attempts fail (persistance), you could consider filing chapter 13 bankruptcy. Do consult a qualified BK attorney who will advise you on your options, including if you do the short sale route. As you may be subject to capital gain (loss) taxes if you short sale. As I am not a BK attorney or tax consultant.
Good luck Argemy; be persistant and keep the faith!
Fortress Realty Group
First recommendation would be to consult with your CPA. Find out if it's possible to pursue a "Short Sale". They will be able to tell of you any tax ramification's you may encounter if pursued.
If your CPA feel s that this process is worth pursuing, contact a reputable real estate agent in your area to get started with the process. It can take months to get an approval on the S/S process so it's best to start early.
Best of luck!
I am in full agreement with Kathy. First find out the tax ramifications. Then speak with an experienced short sale agent to understand the ramifications of selling the home short. There are also ramifications related to recourse and non-recourse loans. Your original paper work must be looked closely to understand your options and your risk.
Absolutely check with a tax consultant to verify the implications for a short sale.
I live in this same zip code and we have been listing and selling short sales and reos for a couple of years now. I think you are wise to check with someone about the steps you need to take.
You want to know this information and then make your decision.
Is your loan a recourse loan or non-recourse loan?
What type of financing do you have on the property, interest only or amortizing?
Is your lender going to foreclosure by Judicial or Non-Judicial process?
Once you know these things your options become very clear. Good luck!
Hannah Fliegel, FICO Pro
As far as the tenants, depending on your lease agreement, even if the home forecloses they have right to stay there as long as they are paying market rent. The new owners have to honor the lease agreement. Unless its bought at a trustee sale auction and the new owners want to move in ( they only give them i think 30 days to move out). Just work with your tenants and let them know whats going on so they arent out in the cold. They probably have a family.
Good Luck with it.