I got a lead today for a homeowner that was thinking about doing a short sale. I called him up, introduced myself and told him who referred me. Good thing, he was already waiting for my phone call and was prepared and very honest. He is still current with his payment, but knows he will not be able to make them any longer. He lost his job due to illness about 1 year ago and his income is just not enough anymore to support his family and his house payment. For the last year they have been making the mortgage payment by taking money from their savings - emergency funds. This fund is empty now. So, now he waned to know  "What should I do?" I wish I could have given him some hope, but there is no way he can avoid a short sale or foreclosure. The property value in his neighborhood has come down by nearly 50% in the last two years. Now instead of having 20% equity in his home, he is upside down by 30% plus closing cost etc. and counting the time it takes to completed the short sale process, we are at minus 40%

Hi knew all this, but I guess he just had to hear it out loud for the reality to kick in.

I see this all the time. Homeowners know they are in trouble but they just do not make a decision. I can absolutely understand this. You are emotionally involved and of course you hope that the market will turn around in a month or so. In the meantime you try to make one more payment and one more payment and somehow one more payment. And all this time you carry the burden of "knowing" with you.

To put your house or condo up for short sale is a tough decision to make, and most people need help making it. The banks are NO help right now, they only add to the frustration by NOT listening to the homeowner.

So, call your Realtor, get his opinion, he is not emotionally involved and might be able to help you put things into perspective. Take action now, unfortunately time is not on your side.