Florida Short Sale - do not know what to do

[Joel Fraser]

I own a condo that is an investment property. I bought it 5 years ago as an investment, but wanted to move into it in the future. I ended up getting married and buying a house and now have to keep up both properties. I was breaking even on the condo until my mortgage increased and my HOA fees increased 125% plus they added a special assessment. So I have been $1000 in the whole each month for the past 7 months. I cannot do it any more. I have an interest only ARM loan, which increases next year. I put the property onthe market to do a short sale, got a buyer and went through the approval process with the bank. I bought the property at $175k and owe about $173k and we are selling it for $100k. Here is the kicker, my bank is EMC and they accepted the short sale, but I have PMI also. The PMI company wants me to sign a promissary note with them for $35k for 10 years at zero percent interest. Is this normal and is it a good way of getting out of this property? What is the benefit of doing this verses foreclosing or a deed in lieu? Please help. I need to make up my mind on what to do! Kimatw