So you owe more on your house than it is worth? If so, you are one of many, but that does not qualify you for a short sale.  There are 3 major items that banks will be looking for to consider a seller for a short sale.   There will be much more information required, but this is an excellent place to start.  You have to meet all three of the following to qualify:

Financial Hardship

A verifiable issue that has caused a material financial change between the day the mortgage was signed and now, such as loss of income due to job loss or business failure, medical expenses, adjustable payment that has increased.

Monthly Shortfall

Pretty self explanatory.  If the money that you bring in each month is less than the monthly expenses, that equals a shortfall. If you do not currently have a shortfall, but will soon have one due to a pending layoff, etc, you may qualify.

Insolvency

The lender wants to see that you owe more than you have coming in and do not have other means to pay down your loan.  You do not need to be completely broke, but over time will be unable to pay your home loan obligation

If you want to stay in your home and have not been forced to leave the area to find work, then a good first step might be to seek a loan modification.  If the lender is not cooperating or you still have no choice but Short Sale or Foreclosure, then a Short Sale should help you get back on track sooner.  As soon as you foresee a problem, take steps immediately as the process is lengthy.

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