Yes, You CAN short sale even if you are not late on payments! The key to this is to document your HARDSHIP situation.
Some points to consider:
Short sale your PRIMARY residence. The lender will send you a 1099 for any loss from the short sale, but it is only NON-taxable for short sales/foreclosures on your Primary Residence.
Next, find a Realtor that is Short Sale EXPERT. Interview a few and dont' be deterred by inexperienced realtors that poo poo on short sales. The good ones will work hard to help you out!
Document your Hardship and send it immediately to all the lenders (firsts and seconds) of BOTH your properties.
Send a cover letter with the following additional documents; most recent bank statements, most recent paycheck stubs, list of all your monthly expenses, most recent tax return
You cover letter should give the lenders the "option" of giving you a special forbearance: " Dear Lender, I regret to inform you that I am not able to make the minimum payment required on the loan for this property.The minimum payment is beyond my ability to pay in my current financial situation. Due to the economy, in I have not been able to earn enough to pay all my current obligations. I would like to request forebearance of the loan for as long as possible to allow me to pay a smaller amount until such time as my income improves, or I am able to sell the property, I will continue to make the payment of $xxx.xx (put in a smaller amount than the usual – like 50%) and would hope that you accept this as an alternative to forclosure.
Give it a whirl. You never know until you actually try if any of your lenders will be willing to help you out. They would rather that you work with them instead of letting the properties foreclose, so just try.
