Most lenders consider performing a short sale is there has been a change in circumstance after the loan was originally obtained to prevent a borrower from making payments.
What are some possible reasons?
Divorce
Medical Bills
Job Transfer
Loss of Income
Mortgage Rate Reset
The lender will want a hardship letter explaining what happened to cause the inability to keep up with mortgage payments. An unqualified reason would be “the market has declined”
If a seller has a lot of savings, the lender may request for a “contribution” to offset some of the loss. They may even ask for a “promissory note” if the borrower shows a good income stream, often at a favorable rate and terms.
