Short-Sales are getting more difficult

These are 3 main problems why Short-Sales are getting more difficult.

1. Most solutions, such as Forbearance, Deed-in-lieu of foreclosure and short-sales require lender approval and negotiations. However, as David and Bill point out, many lenders are shutting down the lines of communication.
2. As Lynn Frantzen points out in "Short Sales and mortgage insurance" , If a lender has mortgage insurance such as PMI , (Private Mortgage Insurance) they can collect money on insured loans if the home is foreclosed upon.
3. Finally, Mortgage insurance companies and Lenders , in a sense, denying short sales by aggressively insisting that the deficient monies be paid back. Read Brain Brady's Guide to the effect of mortgage insurance on short sales.

There are a number of factors to consider if you get that ugly little Foreclosure Notice and before you attempt a short sale.

Especially here in Phoenix, Arizona where Deeds of Trust change the landscape a bit.

Here's what you should do 1st.

Contact your lender before or as soon as the potential foreclosure problem arises. You can do little to help you out of the situation without speaking with your lender