My Buddy Needs Help!!! Foreclosure is coming...

[Scott Kiessig]

My buddy is in a situation that from my point of view is not looking to good.

He currently owes $370,000 with a 1st, and 2nd. The 2nd is a ARM that is about to adjust to make the payment close to $5000 which he will not be able to afford. He was in the process of refinancing, but when they did the appraisal, the value of the house has dropped significantly. It is only valued at $335,000. Which makes it impossible to refinance.

There is no one available to loan him the money to make up the difference.

Should he work a short sale with the bank and try to sell on open market? should he let the house go to foreclosure? Should he file bankruptcy?

Are there any other options for him. He is currently not late on any payments, but will be soon once the payments starting jumping.

thank you