Since I see this page still appearing in the searches, I wanted to post my information in case anyone is looking for an "experienced" short sale agent. The question is very valid and sellers often just hire an agent based on a verbal statement as to how many short sales they've complete, and that is a grave mistake. I can print out and show you actual Multiple Listing Sheets that will prove that I personally close an average of 12 short sale listings each year, and I've been closing short sale since late 2009.
If a home seller has two mortgages and/or an FHA mortgage or an uninsured conventional mortgage, or has taken out an equity line of credit, I always enlist of the services of a real estate closing attorney and paralegal. Their fees are paid by your lender at closing, just as the real estate commissions are paid by your lender. Real estate attorneys obvious remain informed of the ever-changing FHA short sale rules, and they have the tenacity and experience to negotiate with the tough investors often associated with uninsured conventional mortgages.
Navigate to http://mrtownhome.net/short-sale-info/ for comprehensive information about the short sale process, and always feel free t reach out to me anytime.
Frank Biganski, Residential Real Estate Agent
The short answer is no. You can not just walk away and hope that the bank will take the property. If you walk away and stop making payments it will go to foreclosure and you will incur all the penalities of going to foreclosure that has been laid out by bob.
However, if you go through the fha /hud loss mit options and get approved for the short sale and the appraisal is completed and your real estate agent does not sell the property. Then maybe the bank will allow you to do a deed in lieu in there is only one loan and you meet the hardship criteria.
A deed in lieu will still hit your credit hard, but the start date will be sooner than a foreclosure because the deed in lieu goes into effect on the date the deed is taken and the foreclosure effective date is the confirmation date of the foeclosure.
You have many options available to you! What you do not want to do is ignor the situtation. Start talking with your lender and a Realtor in the area. They can help provide you with your options. For information about avoiding foreclosure visit my website!... more
Sell the home and make sure that the purchase contract (if this is going to be a short sale) has a clause that the bank will not file a deficiency judgment against you after the sale of your home AND another clause stating that they will report your mortgage on your credit as paid in full along with a letter to back it up (sometimes the banks don't updated the bureau correctly) and go to the IRS website and fill out the proper forms of hardship so they don't charge you income taxes on the difference of the sale amount and your mortgage. If you do a deed in lieu, you will owe income taxes on the whole mortgage, it may be harder to plead a hardship with the IRS when they will see on record you had an offer to purchase your home and it will will report negatively on your credit report. You are saving time and money for the bank by doing a deed in lieu when you could just force them to foreclose on you which allows you to live in the home longer and save your money.
It sounds that you are afraid of the offer not going through and you want an easy way out, but this is a home investment that you made and although people may paint home ownership as a pretty picture, in some cases its not. My direct advice is to suck it up, take the deal (short sale or not), apply the simple techniques indicated above (and get an attorney to assist you!) and get this house behind you so that you can move on.
And think twice before you attempt to purchase your next home (which will be A LOT harder if you do a deed in lieu).