[The Professor]

The obvious tactic is to see if the lender (aka your partner) has an interest in doing a short sale in full satisfaction of their debt. The obvious answer is "it depends." If they are smart, given your other assets my guess is they will say no. If they are overwhelmed, which is a real possibility, they will go along with the idea. So in essence, "there's no harm in asking."

A key factor in their decision making process is whether or not they can obtain a deficiency judgment after foreclosure in North Carolina. My research, although not entirely clear, indicates they can. You need to contact a lawyer familiar with real estate law and debt collection practices to provide an answer so you can make an informed decision.

Danie