1) The balance may be forgiven. However, in this event, you may be responsible for paying taxes on the "forgiven" amount (this can be viewed as income). Although many lenders have not pursued this avenue, it's a viable consideration that should be addressed at the time of negotiating with your lender; or
2) The balance may be structured into a separate agreement between you and the mortgage holder.
Although I'm all too familiar with the short sale scenario, I do not personally handle these transactions. However, my office (Re/Max Crossroads) does has several teams that have streamlined the process in order to ease your frustrations. I'd be happy to guide you in the right direction. Also, please keep in mind that there are other options that may be available to you. I would recommend you contact a real estate attorney to further discuss. Should you need referrals, please do not hesitate to contact me directly.
Wish you the best of luck!
Colleen Rock, CRS
RE/MAX Crossroads - 440-895-1111
Short sales, as you can see from other posts, tend to take on a life of their own. On our staff, we retain a licensed short-sale attorney, and before you make a decision whether a short-sale is right for you, he helps us determine the probably outcomes. In a recent scenario, one of our clients sold a for literally HALF of what he owed on his mortgage, but our attorney was able to get him the bank to forgive the difference with no financial penalty to the seller. Again, each scenario is unique, but certainly contacting a real estate agent with experience in short-sales is the best way to get information and make an informed decision.
Scott Phillips Jr.
Keller Williams Realty Downtown Cleveland
Realtor & Managing Partner
firstname.lastname@example.org - 216.849.8333
Regarding the remaining balance of your mortgage, it is really up to the bank on what they want to do. Have you discussed your concern with them? I have found that it is best to be up front and open with the bank and it really aids in the process. If you would like to sit down and discuss what your options would be in selling your home as a possible short sale, I would be more than happy to meet with you and discuss how I can help you. Please feel free to contact me at anytime.
Howard Hanna Real Estate Services