Thanks for your question and good afternoon.I am the professional that will be assisting you today.My goal is to give you a full and complete answer.

You would not need to do anything other than to contact the lender here and ask about a short sale and deed in lieu as possibilities.They will ask for financial information and you will have to respond and disclose to them your financial situation.You need the lender to consent to such a short sale and /or deed in lieu as options to get you out from under the house here.

For your information you should be aware that a lender may pursue a deficiency judgment against you for the difference loan balance unless they agree to waive it in writing. In Arizona, a lender may seek a deficiency judgment under A.R.S. §33-729(A) which pertains to purchase money mortgages or A.R.S. §33-814(G) which deals with deeds of trust.* These anti-deficiency statutes apply only to real estate that does not exceed two and a half acres, and that is either a single one-family or single two-family dwelling.

Generally, it is also important for you to consider the tax consequences when in a short sale as well. One must determine whether the loan on the property is recourse or non-recourse. If the debt is "recourse," the debtor is personally liable for the debt. If the debt is "non-recourse," the debt is only secured by the property, and the debtor is not personally liable for the balance. Note that Congress passed H.R. 3648, the "Mortgage Forgiveness Debt Relief Act of 2007" or MFDRA. This legislation is effective for discharges of indebtedness on or after January 1, 2007 and before January 1, 2010. The Federal Bailout Legislation H.R. 1424, passed on October 3, 2008, extended this legislation through December 31, 2012. So consulting an accountant about the tax issues and potential liability is a good idea here before you agree to a short sale.

These are all issues you may want to consider and to check into as well in any short sale situation.You would want to see if lender would agree in writing to waive any deficiency otherwise it may be an issue for you.

It would normally not be considered if you cannot access it.They will ask for financial information from you on all of this.All you can do is be truthful and see if they will agree to it.

A deed in lieu here would be best option.That is where lender agree to take it back and not pursue any deficiency.Often they will require you to try a short sale for a period of time before then agreeing to a deed in lieu.You should ask the lender about all your options in the matter.

And talking over the tax implications of both with your tax preparer as well or CPA is a good idea as well.

And you also may consider involving a local lawyer to assist you as well to negotiate with the lender concerning a short sale or deed in lieu.

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Please be aware that the information provided here is not legal advice. Rather it is simply general information. This communication does not establish an attorney-client relationship with you.

I do wish you the best here with your lender.I hope they will give you the options you need here to get out from under the property and avoid Foreclosure.

All of these have some affect on your credit..The realtor is giving you good information.See if the lender will either agree to a short sale or a deed in lieu.Both of these would impact your credit less than a foreclosure.But all have some impact on your credit.Start with the lender and go from there.

Your realtor may also help you with the lender here and options.

You're welcome.Thanks for letting me help you.