Has anyone gone through a short sale on their rental property? We are thinking about trying to get approval. Our rental was our primary house and we moved over a year ago. The house is worth 95k and we still owe 115k. The process of renting the house and dealing with tenants is extremely stressful to me. And we lose money each month on the house because we can't charge enough to cover our mortgage. We have an 80/20 loan and the bank won't refinance. Just wondering how you recovered from the short sale and any advice you can give.
I've gone through the process on the other end of it and it can be fairly long and arduous. It's always best if you can get an offer on the property first to get the ball rolling. A lot of banks don't want to deal with a short sale unless there is an offer on the property. But even if you don't have one, it's worth starting the process. You will need to provide them a bunch of financial information and a hardship letter. If you do get an offer, they will usually (depending on the bank) do a BPO or appraisal to figure out the value, and then accept some percentage of that valuation. Some banks, like Bank of America with their Equator system, of automating most of it, and in that case, it's just a matter of going through that process. I hope that helps.