Understand the difference between short sale and loan modifications

Short sale happens when the borrower cannot afford to make the monthly payments and has to find a means of getting out of the bad financial circumstances by selling the home. Short sales is a process that usually is not favored by the lenders because it’s a process where the lenders make a loss. Lenders are usually losing about 40k-100k on sale of every house. Thus they would allow short sale to happen only if it is beneficial for them as well as you.

However, loan modifications are easier and better options since it is something that even the lenders prefer because as it is the lender or bank does not want your home, they want their payments, and they are ready to wait a bit longer for it. Thus if you think at the core, loan modifications help you save your house and make payments. It is much better process than short sale because both the parties involved tend to benefit in this process.
Some basic things that you will have to do are:

•    Calling the Lender
•    Submitting Letter of Authorization
•    Preliminary Net Sheet
•    Hardship Letter
•    Proof of Income and Assets
•    Copies of Bank Statements
•    Comparative Market Analysis.
•    Purchase Agreement & Listing Agreement

And as far as present scenario is considered, loan modifications are definitely the thing because short sale is a very week options as the property rates has fallen. However take a informed decisions as to what exactly do you want to go for.