Friend of mine put me in touch with a banker he uses locally.

A few things . . . your profile says you're a banker, but you say you're an agent.

I mentioned the U.S.A already has one credit downgrade and with the fiscal cliff could happen again.The banker stated he sees at least 2 credit downgrades in the coming 1 to 2 years for the United States.

US Bank is offering owner occ 3.99% 15 yr and 4.4% 20 yr handled by their personal bankers.

Specifically, it seems to me you need an attorney, accountant, and a banker that fully understand your scenario before you can make any educated decision. 

If what I report is true then after taking as much cash as you can, and then stay as long as all any banker would continue to finance it the kind of conditions as you have described.

You are proving what all of us believe about bankers and that is that they are deceptive.

@Scott Lewis, the best way to see where cap rates are sitting is to talk with broker and commercial bankers in the area.

Define this, be it by yourself or by a banker... get your limits set.Second, find an area that has a vast supply of properties in your target price range.

I have read a little bit about short sales, but talked to my local banker and he told me that there is NO WAY Wells Fargo will settle for a short sale even if they take a loss.