You could also try a deed-in-lieu of foreclosure. It's similar to a short sell in that it's a negotiation with the mortgagee. You basically give ownership of the property to the bank and they consider your mortgage partially or completely settled. It is a way to free yourself from some or all of the debt (and the property). If they sell at more of a loss than they expected down the line, however, they may be able to come after you for the difference. It shows up similarly as a short sell on your credit report.
Just like you, lenders want to avoid foreclosure--it is a time-consuming and expensive process for them to go through.
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