A short sale occurs when an underwater borrower is allowed to sell a home for less than they owe on their mortgage, and the bank forgives the remaining debt on the loan. It is mutually beneficial for the borrower and the lender.
If you owe more on your mortgage than your home's value, you're a potential candidate for a short sale.
X No Permanent relief
X Up to 7 years before you can buy a home
X Highest ding to your credit score
X Temporary relief
X You're still tied to original debt
X Loan modifications can increase your payments
X 80% of individuals behind on mortgage are eligible for loan modification
* Permanent relief
* You're free of debt
* Buy a home within 2 years
* Lowest ding on your credit score