There are a few things that you should be prepared to do before venturing into a short sale transaction.

The mortgage holder has to accept that your situation is worthy of a short sale. Remember, they are going to ultimately take a loss on this. If they approve, they could pass this short fall onto you as a 1099 at closing.  The government sees this as income to you and expect you to pay taxes on it. (Tax laws are changing on this regularly, check with your Tax preparer)  You might not have to anymore.    

Check the IRS site:    http://www.irs.gov/individuals/article/0,,id=179414,00.html

I will need a copy of the following things from you:

1. Signed Authorization to talk to your lender(s)
2. Most recent mortgage statement.
3. 2 years tax returns that are signed
4. Two most recent pay stubs.
5. Two months Bank Account Statement(s)
6. A Hardship letter written in your own words of why you can't pay your mortgage on time or at all.

The banks will want to see these items in order to consider your request.  If there’s a second mortgage, most likely both will have to approve the short sale.  I will do my best to get the approval, but there’s no guarantees that they will accept it.

The approval process could take anywhere from 30-90 days and is not a fast process.

This is a very emotional process and I can help you keep things in perspective and not get too overwhelmed by everything.  Ultimately, you want to get this property off your credit so you can regain control of your life.

Tips & Warnings