Cana short sale be approved for a rental property?
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Cana short sale be approved for a rental property?
The home my mother lives in is in my name because she didn’t have the credit to purchase. She has paid all mortgage payments and upkeep (all payments on time). She is losing her job and won’t be able to make the payments any longer (she is 60 and the chances of her being able to get a job making enough to pay the mortgage are very low). I’m upside down on the loan and own another home in a different area. My mother is going to have to move in with me. What are my options to get out of this mortgage? I heard that I can’t refinance a lower payment since it is a “rental”. Is a short sale possible?
Asked on August 13, 2011 Hawaii
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
A short sale is possible, in that it's up to the bank/lender to decide whether or not to accept it--short sales are never required, but are always voluntary on the lender's part. Whether they will accept it depends on a myriad of factors: how genuine do they believe is your financial distress; how "short" do you want to sell, and how much of a haircut do they have to take on the loan; how the local real estate market, for this type and value of property is; etc.
Other options to consider:
1) Consult with a bankruptcy attorney. In a chapter 13 bankruptcy, there is some abilty (called a "Chapter 13 cramdown") to reduce the amount owing on investment property (not your primary residence).
2) You may wish to put both homes on the market, see which one sells, then move into the other.
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