Just because you owe more than your home is worth does not mean that you will be eligible to do a short sale.  The key is being able to show that you qualify based on a acceptable hardship.  The lender needs you to explain your situation in a hardship letter.  With that, there are items they will need.  These items include the following:  A financial statement showing what your current assets are and what your expenses happen to be, A couple of recent paystubs if you are employed that show your year to date income, all pages of your bank statements, your two most recent signed tax returns, asset statements like 401K & IRA’s, and a list of any other liens that encumber the property title such as back real estate taxes, second mortgages, third mortgages, and IRS tax liens that are recorded against title.