This is NOT the single indicator of ones ability to rent a home. We manage homes in east contra costa and have been able to place many tenants who are in a similar condition. If you are interested in our rental application process, view the web reference.
Have you tried to get a modification?
You may be able to get a principal reduction to 115% of current market value.
As of June 2012 we have the Tier 2 program that you may qualify for a modification even if:
1) your npv negative or have excessive forebearance.
2) you were previously modified.
3) you MAY be able to get your payment reduced to between 25 - 31% of your gross income
4) Depending on your income and lender you may qualify for the Keep Your Home CA program they may be able to give you$20,000 to bring your home current.
Depending on your income you may qualify for free legal aid to assist you in a modificaiton. I would call one of the larger law schools Stanford or Berkeley to check their legal aid program. I know there is a specialist in Palo Alto who will sue the lender but youhave to have low income to qualify for free help.
Lastly, I would negotiate with your lender to get as much moving help as possible. Some lenders may give up to $30,000 for you to move.
I work for a Real Estate Attorney /Broker I think in your situation you should have an attorney assisting you on your short sale. Typically the lender pays the fees and you would have free lega advice if you have an attorney do your short sale.
At the moment there is a small surplus of rental houses in east Contra Costa (Pittsburg, Antioch, Oakley, Brentwood). This is NOT true in other parts of the county. I believe there are quite a few landlords out there right now who will accept short sale and foreclosure victims. I do a little bit of management for some clients and I always advise them to consider short sellers. The trick is not having a bunch of collections against you that range over many years. A short sale and collections from the same year as the short sale do not indicate a bad money manager. That's just a single bad year. But a collection for this or that in 2004 and another collection for something else a year later and others that are spread out over many years indicate to me a bad money manager. I would eliminate that sort of application easily. Also make sure that you have at least 2.5 times and preferably 3 times the income as the rent. $2000 rent requires at least $5500 in monthly income.
You mention you have 3 to 6 months of payments - I'm not sure what you're saying here. Is it that you have 6 months of payments and then that's it? If so, again, it might be pretty hard to get a landlord to see the merits of renting to you.
That said, I have seen landlords who are sympathetic to those who have lost their homes in this economy and are willing to look at an application from someone with far less than perfect credit. You might want to find a realtor that can go to bat for you on listings that are in the MLS. Rental properties found there are a better quality than those found on Craigslist.
Bernard Gibbons, J. Rockcliff Realtors
DRE License # 01331583
Phone (925) 997-1585 - firstname.lastname@example.org