To give you a brief background my husband and I bought our home in 2006 in NJ. In 2007, our town put a Dam into operation and since then my home has flooded 6 times. The value of my home has decreased by almost $200K. We have two loans, the first has about $290,000 remaining, the second has about $20K (the second is a Home Equity Line of Credit)
Right now we are current on the mortgage but are trying to decide what to do. We would like to short sale the house, but we are confused. I am hoping to try an sell it for about $200K which would leave $110K balance on the mortgages. We were told that in order to short sale and not have a deficiency judgement against us for the outstanding $110K, we need to show hardship and therefore it would probably be best if we default on the mortgage now. However, we know that if we are in default when the short sales goes thru, we will have two wait two years to buya new home. My question is...if we were to stay current on the mortgage and then short sale, would we be slapped with a deficiency judgement because of no hardship? Has anyone proven hardship with their mortgage being current at short sale?