I am not trying to be antagonistic at all, but even though your girlfriend is not "related" to you, I am still not sure the bank would look at the transaction as NOT being at arms length if you are in a relationship with the person buying the house and will moving back in after the short sale. Kinda touchy territory, so I would definitely speak to an RE attorney familiar with short sales and get their perspective of what the law and/or the banks may think.
I still think you should also speak to the bank about restructurig the loan if you have proof that the house is only worth $15,000 and you owe $98,000. Plus if the $15,000 is correct, I am not even sure the bank will eat a loss of $83,000 in a short sale. You would have to prove "hardship" to the bank and as far as I can see, if you are not behind in payments, haven't lost your job, or suffered any other financial hardship, the only hardship is that you don't want to keep the house.
Also just a thought, but since you won't be able to put your name on the title or the deed, what will happen if you and your girlfriend break up? She owns a house... and you? In addition to my previous comment about you credit rating getting screwed up for at least 5 year...all something to think about.
I understand your point about the finances, however, if the sole reason you are looking to sell the house is "strategic default", meaning you are not behind in payments, but don't want to "wait" 10 years till the value of the house comes up, that's a totally different story altogether. While not "illegal" , and IF the bank approved the short sale, it is IMHO, a bit unethical, and adding more fuel to the fire that has caused part of the housing collapse to begin with.
Everyone is unhappy paying on a home that has lost value, and you've got plenty of company these days, unfortunaely, with people who are upside down on their mortgages.
The questions are - Can you afford to keep paying? Have you lost a job? Have you suffered any other personal set back that would prevent you from making your monthly payments?
If the answers to the above questions are... No, no and no.........then a short sale probably isn't even an option.
Short sales aren't used or approved because people are "unhappy".
Speak with a real estate attorney who handles short sales, and explore whether this is even an option, regardless of whether your girlfriend can buy the home or not.
Also- what makes you think the home is only worth $15,000? Have you had it appraised...or, .have you had a Realtor in? Make sure to verify your numbers.
As Debbie said, now that you have shared the entire picture, and it seems you have no options at this point, and I too am sorry about your financial woes.
Speak to a GOOD RE attorney immediately, who is familiar with short sales, and knows how the process works. That is really the only way you are going to know for sure LEGALLY if she can buy the home and the transaction is considered at arms length.
Best of luck with the process, and do let us know how things work out for you.
I am sorry you are in financial distress, and have suffered the loss of your job.
By all means try for the short sale. It seems as though you have already started the process.
You really do need to get legal advice regarding your girlfriend buying the home.
Like you said, if it's not this home, she can buy another one, but I understand why you'd like to remain where you are.
If you find that you can sell the house to her, make sure you sign an offer at market value, and not an artificially low figure, or the bank will just reject it down the road.
All the best.......
However no lender can tell a property owner who can be a resident if she purchases the home for cash
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Fraud is fraud and I am sure any real estate attorney worth his/her salt, once finding out it's your girlfriend, will not agree to represent you and be a party to the fraud. Believe me, you WILL need an attorney to help handle a short sale if it comes to that!!
However depending on how upside down you are in your mortgage, have you tried discussing with the bank to modify the loan and/or payments to make them workable?
Or if your girlfriend can afford to pay cash for the house, how about having her help you get the mortgage current, and you can keep your house?
Maybe you don't realize that a short sale affects your credit, tho not as long as for an actual foreclosure, but it does hurt you substantially.. Before you decide to try to defraud the bank, why don't you try to see if you can work something out that will allow you to keep the house, AND keep your credit in relatively good standing.
Prudential NJ Properties
SFR Certified (short sale and foreclosure resource)
You will need a Realtor to try to make one happen. The Bank will generally not work directly with a Home owner or a Buyer...
Good luck to you!