If you’re having trouble keeping up with your mortgage, and you don’t have any equity, I wanted to remind you of the two main paths out of this situation.
1. Loan Modification – This is when your lender agrees to rework the terms of your loan so you can stay in the property. The new terms can take the form of a decrease in interest rate for a set time period and/or an extension of the length of the mortgage. Be cautious of the "loan modifiers" popping up everywhere. They must be licensed as mortgage brokers with the state.
2. Short Sale – This is when I list and sell your home for less than what you currently owe on your mortgage. The "shorted" amount is the amount the bank "eats" in exchange for avoiding a foreclosure (a win-win for you and the bank, in most cases). Most banks are willing to consider a short sale because a foreclosure costs them many thousands of dollars and they may end up selling the home for the less than they could have received in a short sale.
Please contact me if you have any questions about loan modifications or short sales.