1. Maintain the homestead on the property, this is key for certain tax advantages especially if you refinanced and took cash out at any point while you owned the property.
2. Do your best to get the deal done by the end of the year. Certain rules are changing with short sales and taxes so it's in your best interest to do everything you can to sell by the end of 2012
I hope this helps... I know a great agent that has done a number of short sales in Pinellas County and would take good care of you. Let me know if you would like a referral.
Whether you stay or you go, dealing with your financial situation should be paramount. Have you spoken with a bankruptcy attorney? Sounds like you need some legal and tax advise. Seek good counsel.
Right now lenders are reducing the principal amount owed. This wasn't the case in the past but with the "settlement" for the Robosigning fraud some of the Settlement money is being used to reduce the principal amount owed. From my understanding this is only if the lender, i.e. Bank of America, Chase, Wells Fargo actually is the "investor" that owns the mortgage.
So first call the company you make your payment to (the "servicer") and ask them who the investor is that owns your first mortgage. If it is BofA, Chase or Wells then you may be able to lower the amount of your principal by as much as $100k! If it's Fannie Mae or Freddie Mac or another investor (ie Deutchebank, etc.) then you may not have a chance for the principal reduction.
Worse case, if you decide to do a short sale and are in an HOA just make sure to pay the HOA dues because many HOAs are foreclosing and you will have little control over the process.
All the best,
Alma Rose Kee
Future Home Realty
Thanks for your inquiry.
Chas Burdick - Burdick International Realty
You can do whatever you think is best for your family. The advantage of staying for many people is that they save the money they may be paying in rent or mortgage. The bank may require some payment to forestall foreclosure long enough to allow the short sale process to take place.
My suggestion would be to find an experienced agent to handle the short sale. Price it at a point that will generate offers quickly and still stand a chance of getting approved. You will shorten up the "showing" phase and get to wait out the approval time.
Going through foreclosure is the most damaging option to your credit and will take the longest to recover from.