I have dealt with this situation many times before. Mortgage is More that what the Home is Worth? Here is an example. Homeowner owes more money than their home is worth ($200000 to be precise) and tries to list it on the MLS for sale for at least the mortgage an mount owed so they can just e rid of the property and can move on. The home values in the neighborhood have dropped significantly and now brand new houses, all remodled, with the works, are selling for only $140000. Buyers are not biting because of the price and the home is left on the market for months.
Homeowners come to me all the time with this problem and we are able to find ways to be able aquire his property without having to go the shortsale route. If you didnt know, doing a shortsale will have negative impacts to the homeowner along with tax consequenses if it is not done correctly. There are still ways the homeowner can sell the home. If you are a realtor with a client that is in this situation or looking to sell your home and are underwater let me know I may be able to help.