Lenders will not consider a short sale (sale price below loan amount) until there is a valid offer on the table. However, you can and should open the discussion with your lender immediately. Let them know that there is a hardship and provide written documentation.
Next contact a real estate professional in your area and get a solid understanding of the true market value of your property in the current market. Once you recover from that, if its commercial prepare to list the property for 25-50% less than market. If its residential there are more buyers out there and the discount might not be as severe. But to achieve a fast sale, it takes a very aggressive price.
Jan 16, 2009