Well you options are limited but you do have options. I get this question all the time. I will give you the quick version of some of your options. You can try to rent the property and wait out the market. The problem with this approach is that the market is not going to recover enough for you to recover your negative equity any time soon. The other problem is that this option is a very “long term” option. Some people will have success with this option but only if they have a low mortgage payment that they can get covered by the amount of the monthly rental income. There are plenty of people that are needing to rent properties here in the Valley.

Your next option is to do a loan modification. The enticement of this option is definitely out there and most people fall prey to the promises of a loan modification. Unfortunately they tend to not be as great as the homeowners were hoping. If you are in the minority of people who can actually qualify for a loan modification then you still have the difficult  task of getting the paperwork passed through and the new rate. If you are able to get it all done the you will be able to enjoy a new lowered interest rate! Be careful of companies here is our Arizona Valley that are trying to entice you into using them for your loan modification. In most cases they don’t have any better of a chance to getting it done as the homeowner and they charge a lot of upfront money. BE VERY CAREFUL.

Another option is a Deed-in-lieu of foreclosure. You have to be careful with this one and they aren’t offered to everyone. The good thing about a Deed-in-lieu is that in most cases the bank will actually pay the homeowner to do a deed-in-lieu. I would strongly recommend speaking to a real estate attorney before going with this option. There can be some hidden consequences to this option.

One of the best options is a Short sale.  This option isn’t for everyone. The short sale process is a long drawn-out one that can be pretty aggravating but had great long term affects. You credit will generally not be hit as hard as when you have a foreclosure. The problem is that there is a chance that your home might still be foreclosed on if the bank doesn’t agree to the short sale. In most cases it’s in the homeowners best interest to do a short sale. Again, I urge all of my clients to consult with a real estate attorney before we do a short sale on their home. If you want to know more about short sale specific questions the click here. If you want to see even more options then click here to download our free 9 alternatives to foreclosure ebook.