In 2006 my wife purchased a home. We got married in 2007. Shortly thereafter the AC unit died and we needed cash to replace it. She took out a $20k HELOC to cover that and pay off some other debt accrued in the process of fixing up the house. (it was a fixer-upper)
Life happens, in early 2011 we had 2 kids and one more on the way. The home was getting smaller around us. Owed $172k BOA first, $20k Desert Schools FCU HELOC and the neighbor's larger home sold for $83k. My wife contacted BOA to ask about a loan mod or underwater refi, they looked at our combined income and told us to pound sand. We kept current on the loan and put away money and had our 3rd child. We stopped paying both mortgages in december. I found a lender who didn't care that my wife is walking away from an underwater mortgage and bought a more appropriate home last month as my sole and separate obligation. My wife signed a disclaimer deed on the new home.
Our intention was to list the home as a short sale, get an offer, see what BOA might offer the credit union to push it through, and make our acceptance contingent on DSFCU releasing us from any deficiency. I cleaned up the old place and got it in sellable condition with all our nice upgraded fixtures in place and several hundred dollars worth of home theater cabling in the walls and attic and we contacted a short sale listing agent. Her contract basically says we need to give her access to tax returns dating back to 2006 and full ongoing financial disclosure and she will give out our personal information to anyone who asks for it without any liability and she is our agent on that home forever regardless of her actual ability to sell it. She said DSFCU is a pain in the butt and she will not negotiate with them at all.
The realtor's contract is crazy, there's no way we're signing that. I'm not in love with giving out my financial information, particularly to these two financial institutions for my wife's sole and separate obligations that we have already decided to walk from. We don't have any financial hardship other than an underwater house that's way too small for us. The only potential benefit for us would be to possibly settle the HELOC with the short sale money, but that's not a sure thing and although it is a recourse loan it's not likely to be collectable as a sold out junior.
I'm really leaning toward just having my wife call BOA to tell them the place is vacant and shutting off the utilities to hurry along the FC process. Are there any other possible benefits to short sale that I'm missing?