Everyone knows someone who has been through a Short Sale. The stigma of shame is no longer a label associated with a Short Sale. After all Mr. O'bama even set up a program to help people to get money to move out with the HAFA program sellers are entitled to a $3000 bonus at close of escrow. Or if you can hang on till the Trusts Deed Sale, sellers will get Cash for Keys, one I know of a squatter that received $14,000 after living in the house payment FREE for four years!
The bad news you will not be eligible for a new loan for two years, with a Short Sale and four years after a Trust Deed Sale. But even these restrictions have some exceptions. Hard money loans are out there they don't even care as long as you can come up with 50% down and afford 12+% interest rate.
Fannie and Freddie are still buying up the loans. The old saying of I owe the company (government) store never rang so true. Where is all this going? Even with the lowest interest rate ever, people will never own their homes, like our Grandparents did. Gen X buyers will still want to move after 5-7 years for what ever reason. So what if you can no longer write off your mortgage interest? Who cares 3 1/2% is pretty small write off.
So why do people even want to own? Renters call the landlord to fix any heating, cooling, roofing, hot water heater issues, home repairs. Owners pay Home Insurance, all repairs, maintenance etc.
What is next? To own or not to own, that is the question.