I have been in short sales for three years now. Back in the early days, I'd spend a lot of time explaining to Realtors and home owners exactly what a short sale is! Today, most people know the basic of them and I usualy talk about the benefits and details they dont want to forget.
I am a Realtor and Investor. I work with people all over the US helping them to find a way out of tough situations with their real estate. Most people I talk to have issues with less income coming in and/or their mortgage payments going up. On top of that most of the time their real estate is worth a lot less than what they owe.
Solutions: Well, most people start with talking to their bank and trying to get a modification on their mortgage. This can work, but in my experience, most of the time the reduction in payments are not enough to help them out of their situation. Also, the banks are strict on how much income you may have in order for them to do a modification. A lot of people have too little coming in.
The second thing people may want to look into is a legal defence from the pending foreclosure action. This has been successful in delaying the foreclosure for months or even years!
Most of the time, even with the first two options, it will eventually come down to either a foreclosure or a short sale. Most agree the short sale is much better than a foreclosure. It leaves your credit in much better shape and often dismissed all that may be owed to the bank!
I will be keeping you up to date in the fast changing word of foreclosures and short sales as we weather this historical time in our country. Feel free to email or call me with questions!