Relocation Short Sale - Likelihood of Approval

[Joel Fraser]

Hello, I have recently relocated from Michigan to Ohio for a new job with a new company. The switch was for a better opportunity and was by choice but if I had stayed I would have likely lost my job eventually due to the current conditions in Michigan (automotive industry). We currently own a home in MI that has the following mortgages: 1st $230k with Wells Fargo2nd HELOC of $108k serviced by HSBC As market conditions continue to deteriorate in my area, I expect the house will not sell for more than 275k. We are not currently more than 30 days behind on either mortgage, but have been struggling to make the payments mostly due to substantial credit card debt with increasing monthly payments. We do not have any substantial assets or cash in bank, but my I do have a pretty good income. My question is if I choose to list the house as a Short Sale what is the likelihood of approval and forgiveness of the short payment? Will my relocation be considered as a hardship? I expect that Wells Fargo would get paid in full so would I only be dealing with HSBC for short sale approval. Is it any easier or harder being a HELOC? Do I need to allow my HELOC payments to go past due in order to have leverage? How much of an effect will this have on my credit and how long until I could possibly purchase a new home? I fear I do not have another alternative given my current situation.