If your in a situation where you have to relocate and need to sell your home before leaving, but your underwater and your only option is to short sell, don't fear!!! FHA has an insurance product for loans to borrowers in this exact situation. If your relocating and short sell your home, you've had ZERO late payments in the last 12 months, and you've had ZERO late payments on any other obligation that shows on the credit report, then FHA will insure a new loan for you. You still have to have 620 to 640 plus credit score and the ratios have to be in line, but there is a loan product out there for your situation. You cannot be doing the short sale to "Take Advantage" of the current market, and you must be able to explain your reason for re-location, IE.. new job, or job transfer, move closer to elderly parent, etc... but there is hope. Contact a local mortgage Broker, not a Bank, and apply with him before you short sell your home. He can shop for a loan for you based on your exact scenario and put the loan in place before you commit to short selling your home. WilliamAcres.com