I donâ€™t understand why it is so difficult for you guys to picture a situation where this question applies without any â€œweirdnessâ€?
Iâ€™m not saying this is the original poster situation, but what about these 2 cases?
1) You bought an apartment 5 years ago for $190K and you owe that amount to the bank. Your mortgage is around $1400 monthly and you are having problems to pay that much. So you got a loan modification and lowered your mortgage to $900 monthly. Great, you can now make your payments. 6 months later you find out that the apartment next door is selling for $60K (a third of what you owe in yours), which would have a mortgage of, say $500. You wonâ€™t be able to sell your underwater apartment, but you could rent it for $900 so that it pays for itself, freeing your monthly income to buy something else, especially if it is going to be a lower payment than what you now can afford.
2) A couple bought an apartment 5 years ago for the same amount ($190K) and have a mortgage of $1400 monthly. They got separated 4 years later, the husband left and the wife has been struggling to pay the mortgage (because of the reduced income she now has). She gets a loan mod and mortgage goes down to $900 monthly. Great. Then 1 year after loan mod, they get back together (income returns to normal), and they have a kid so they decide they need a house (instead of apartment). They cannot sell super underwater apartment (is worth $60K and they owe $190K), but they could rent it for $900 monthly to pay for itself and try to get a house, which now could be around $160K (less than their apartmentâ€™s debt).
How could those work out?