Can I Short Sale my property in my current situation?

I've been wanting to sell my property ever since I found out that it dropped in value by half within one year of purchase and it is still worth the same amount. My brother and I bought the property in July of 2007 in hopes of selling in a few years to make a profit, each of us paying one half of all expenses. We have not missed any of our payments including mortgage, HOA dues, property taxes, etc. It is now five years since we bought the place and both job situations have changed. My brother now makes twice as much as he used to. I was still making the same, up to 3 months ago, when I left my job and decided that I need to change my profession. I was having trouble saving money while having to pay the mortgage all along. I was not able to save more than $100 a month and I am considered to be quite frugal. My life has changed quite recently, I now live with my significant other and would not like to continue feeding the lost cause/ money pit that is my property. I started this thing with my brother and will not allow him to be burdened with the property, he will barely be able to pay the expenses by himself without being able to save. Do my brother and I have a chance at a short sale, please tell me that there is hope...

1 Answer

You really need to be talking with your lender about this. In general, reduced income is a compelling reason for a lender to allow a short sale. Their motivation is to prevent a foreclosure, which is more time consuming and expensive than a short sale. When you speak with your lender, be sure to emphasize how much less you are earning, and that you likely will be defaulting soon. Some lenders will not entertain a short sale if the mortgage is current (figuring if you're paying it, you must have enough money one way or the other), but I wouldn't recommend intentionally defaulting if you can avoid it. Call your lender, ask to speak with the short sale or preforeclosure department, and see what they say. Keep in mind you will have to prove how LITTLE you are making, kind of the reverse of getting a mortgage where the emphasis is on whether you can afford the mortgage, you'll have to prove you CAN'T afford it. Hope this helps!