Initiating a Short Sale
A short sale can be initiated anytime you are unable to pay your mortgage and the home is headed for foreclosure. If you are filing for bankruptcy, a short sale can be accomplished during a bankruptcy if the automatic stay has been lifted as to the lender, or when the bankruptcy has been discharged. A short sale may even be accomplished after a Final Judgment of Foreclosure if it occurs prior to the auction sale. If so, then the Final Judgment judgment is vacated and per the FCRA the foreclosure cannot appear on your credit report.
Lenders do not have to agree to a short sale; however, the lender will usually prefer a short sale to a foreclosure if the lender believes it will receive more from the short sale than from a foreclosure sale. In addition, even if the lender may obtain less, a short sale may be quicker for the lender than a foreclosure, which will allow the lender to obtain funds for the home earlier — and that is beneficial. Go to the following link for more information