My question involves a foreclosure in the State of: Alabama
I have a rental property that I can no longer afford. The mortgage balance is $150k and similar homes in the area are selling (if they sell at all) for around $70k. Due to vacancies, maintenance expenses, prop mgmt fees, etc., I've been burning through my savings for the past year and have run out of options. I'm current with payments, and I'm paying PMI.
I spoke to the lender about modification several months ago and they said it wasn't possible. I've called them twice in the past couple of weeks about my situation and possible options and they seem to be putting me off, suggesting things like borrowing from family to get through this "rough period," selling other assets to free up cash, etc. When I ask them specific questions about short selling, how PMI comes into play, etc., I don't get straight answers.
I'd appreciate any help on the following:
1. If the lender agrees to a short sale, will PMI cover the deficiency?
2. What if any fees/tax consequences will I incur if this goes to short sale?
3. If the lender does not agree to a short sale, and I stop making payments, are the consequences different?
Thanks very much for any help on this.