Friend owns primary residence free and clear in CA (Around 250,000 home). Her problem is a rental they purchased a few years ago. They owe 190, but has gone down in value to maybe 140. She wants to either short sale or walk away. Her payment is around 1400 with taxes and insurance, but the rent coming is 800. Her husband wants to walk away or do a short sale. Their income is not great, just ok. They paid cash for their primary from the profits of the sale of their prior primary.
I am thinking that the bank will not allow a short sale because of all of the equity in their primary. Does anybody know?
I am also thinking that if they walk away the bank will come after them because of their equity - I am not sure.