You MAY consider modifications to help - contact your lender and review the attachment which outlines the HASP initiatives.
If you are planning on keeping the properties, check to see if loan modification can work for investment properties. To my knowledge, loan modification is only available to primary residence and loans that are government secured (Fannie, Freddie, FHA, VA). Subprime loans would not qualify.
If they are not too much up-side-down, and the monthly payments are comparable to market rent, you might consider offer lease-purchase to your tenant buyers so that they can help with the payments for now and own the homes in a few years if they need time to work on their credit. Be sure to do this through an escrow company so that the payments can be made to the right mortgage account.
If you are already behind on mortgage and facing foreclosure, you will want to sell them quickly to prevent foreclosure on your personal credit report. In a shortsale, you will not get any money out of the deal because the lender is taking a discount already. However, the lender might try to ask you to pay back some payments in a few years if you are more financially stable then.
Contact your lender about a shortsale package. Every bank is different but most of them will require you to have a broker (bank will pay the commission), a buyer with purchase contract in place, and your personal financial info and hardship info.
A shortsale process could take anywhere from 2 to 6 months. But when the file is in the loss mitigation department, your foreclosure date should be postponed until the shortsale fails through... In case after several months of negotiation your buyers decides not to wait, you might have a lower pay-off approved by then and can still list on the market for a discount.
Sounds like you're in quite a pickle. When you say "under water" I'm guessing that's Jersey slang for owing more than they're worth. We say "upside down" out west. Do you have tenants in these homes? Is the rent not enough to cover the mortgage payment? Tough spot. Is there any possible way for you to hang on and continue making payments until the market gets better. Maybe then you can list them yourself and actually break even. I would not advise a short sale. just because it's a hot topic right now, doesn't mean that it is the solution for everyone who is "under water." It will have a negative effect on your credit and the process is an absolute nightmare. Especially if you plan to represent yourself and are inexperienced in short sales. The simple fact is that many short sales will not close escrow. Having tenants complicates the matter, because the house is harder to show and you have a lease to worry about. Any vacancy is just going to cost youmore out of pocket. You should get in touch with your morgage company and see if they can work with you. You can be sure thay they don't want the homes back. Maybe you qualify for a loan modification that will reduce your payments some. Keep in mind, in order to qualify for a loan mod or a short sale, you need to have a viable reason. Some type of documented financial or medical hardship. They don't do this for anybody who just wants to lower their payments. Try to hang on and communicate with the mortgage company. I wish you the best of luck!
Realty Executives Southern Arizona