All short sales aren't created equal
You might think that a lot of short sales are due to the combination of high unemployment (yesterday's report by the BLS was 9.8%) and homeowners who happened to buy their home at the top of the housing market and having to sell for less than what they owe.
And unfortunately, that is the case for some but ... all short sales aren't created equal.
Take this all too often example.
How about the homeowner who bought their house, refinanced and took out a lot of equity and is now selling it as a short sale because they can't (or won't) bring any money to the closing to make up the difference between what they can sell the home for and what they owe.
I noticed a short sale that will illustrate this for you (and of course, I'll anonymize to protect the guilty party).
Paid $ in 2004, refinanced in 2006 using that popular home ATM machine for 30% more than originally paid and even though the list price in the Charleston MLS is still 40% higher than the price paid in 2004, it is listed as a possible short sale contingent on third party lender approval.
A homeowner seeking a short sale must write a hardship letter along with providing lots of additional documentation to the bank to get the sale approved and it's hard enough to get lender approval when you actually have a real hardship.
So what is the hardship in this case and what happened to the money.
Why is their wallet empty. 
Photo courtesy of Flickr by -Mandie-