It is estimated that about 25% of home in the US are underwater, that is the owner owes more on the mortgage than the home is worth. So if the owner has to sell, they would have to either make up the difference or do a short sale.
However, just being underwater is not enough reason for most banks to do a short sale. They want to know you have a hardship. what is a hardship?
there are a number of reasons that banks will accept as a hardship. they basically want to know what has changed since you purchased the home. some examples of hardships would be:
1. Job loss
3. Death in family
4. Illness in family
5. Increased expenses from things like debts or an increase in mortgage payments
So basically if your income has decreased or your expenses have increased or you need to leave your home it is a hardship. there are others, but they all have in common that something has changed in your financing or circumstances from when you purchased or refinanced your home.
If you have any questions about selling or buying a short sale in Santa Clara or San Mateo counties please feel free to contact me.
Keller Williams Realty