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Step 1
Contact your mortgage lender as soon as you realize there might be trouble. There are programs available, such as loan modification, that may make debt forgiveness unnecessary. Additionally, a mortgage lender is more likely to work with you on debt forgiveness if you have taken early steps to meet your obligation and kept the lender apprised of your situation.
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Step 2
Make an effort to meet your obligation. Debt forgiveness is unlikely unless you have tried to meet your obligation first. In the case of a short sale, your home usually must have been on the market for at least 90 days before debt forgiveness for the gap amount will be considered.
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Step 3
Show that you are unable to meet your obligation. No mortgage lender will consider forgiving some of your debt unless you prove you are unable to meet your obligation. You can show your difficulty through missed payments or by proving job loss or some other financial problem.
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Step 4
Ask your mortgage lender about debt forgiveness. If loan modification has failed but there is some way for the lender to salvage some of the costs by forgiving a portion of your mortgage debt, offer that option.
Note that it's unlikely that you will have the entire mortgage forgiven. However, a smaller portion is possible. The lender can take it as a loss and will not have to go through the hassle of foreclosing on the home.
