You are in the same boat as most of the other Florida home owners who saw their values melt away as Wall Street mortgage backed securities went bust, the real estate based US economy tanked and the financial institutions got bail out funds without paying it forward.
Here are some thoughts:
1) If your payment is what you would pay for rent if you moved, take your time with deciding what you do.
2) If you could lower your overhead by getting out from under, decide what your next lily pad will be before you jump.
3) Loan Mods are nominal and will probably not reduce your principal. if you are OK with a little less of a payment every month, check it out.
4) With financial hardship provable, a short sale is available. They take a long time.
5) If you stop making payments, a foreclosure can take a year or more right now.
I do not have enough info here to point you in a definite direction. Remember, its hard to get out with your credit rating intact on a lot of these options. Also the specter of deficienciy judgments is raising its ugly head.
Feel free to open a dialogue with me.
Charles Patterson, pres.
Why is the budget getting tight? Has something changed since you bought the property? Meaning your income or your payments. If so, you may qualify for a short sale.
What exactly is a short sale in real estate?
A short sale occurs when the seller owes more on the property than it is worth, does not have the means to pay the difference, and the bank agrees to accept LESS than a full payoff for the amount owed. In such cases, the seller must demonstrate a genuine financial hardship.
Banks lose LESS money on short sales than they lose on foreclosures. Therefore, they have a logical reason to accept a short sale, especially if the sale price is close to the current market value of the property, and it appears that a foreclosure may be likely. The amount owed is not the determining factor. What is important? The fact that the property is worth less than what is owed, and that the seller has a GENUINE FINANCIAL HARDSHIP. These are the two qualifications that are necessary. The fact that the property is worth less than what is owed does not automatically qualify the owner for a short sale by itself.
DO YOU QUALIFY?
Some financial hardship examples include: loss of job, business failure, damage to the property, death of a spouse, death of family members, severe illness, inheritance (when the property is inherited with a mortgage the heirs cannot pay), divorce, mandatory job relocation, medical bills, military service, payment increase, insurance or tax increase, reduced income, separation, too much debt, incarceration.
Sellers do not have to pay the Realtor's commission or closing costs in a short sale. These funds come from the sale of the property, and this is made possible by the fact that the lender is taking less than what is owed.
Sellers are NOT ALLOWED to receive any funds from the sale of the property. After all, the lender is agreeing to take less than what is owed by the borrower. This often amounts to losses of 100's of thousands of dollars on a single mortgage. Weigh the cost of the seller renting a moving truck against the repayment of the mortgage balance and it will quickly become evident who is benefiting the most from a successful short sale - the seller!
Feel free to visit my short sale website if you need more info:
Have a great day!
Keller Williams Fort Lauderdale
Best wishes to you with your Lender.