Losing a job, a cut in job hours and divorce are among the most common hardships homeowners cite when applying for a short sale.
Then there are other life events that inadvertently cause a housing hardship, like getting married when the bride and groom each own their own home.
Tim Gilson, a Realtor with Re/Max Vision in Huntington Woods, Mich., said he recently worked with a client who bought a condo in Novi, Mich., several years ago. Then she met the man of her dreams who had a house in Canton, Mich., and that's where they decided to live.
"They had this extra house that was upside down," Gilson said. "So they put a tenant in there, but were traveling a lot and couldn't be the best landlords. I suggested they contact their lender."
They were current on their mortgage and both were employed, but the bank decided to work with them. They sold the condo for $31,500 in about four months and brought about $4,000 to closing, he said. The homeowner paid $117,500 for it in 2003.
"Their marriage was indirectly the hardship," Gilson explained. "They laid all the facts out for the bank and said, 'We simply don't have the ability to keep both of these properties going.' She was prepared to take the loss if she had to. These are honorable people."
Each short sale varies depending on the type of loan, the lender, the investor and even the mortgage insurance company.
"It has been pretty positive when people genuinely have a hardship," Gilson said. "The change in market value is not a hardship."
A property that is too small and a deteriorated neighborhood are also examples of underlying hardships. Renee Reyer, an agent with Clients First Realtors in Canton, said she worked with a couple who just got married and wanted to start a family but didn't feel safe doing so in their current neighborhood. The lender worked with them, she said.
"There was a crack house across the street and tons of foreclosures," Reyer said.
Ellen Mahoney, president of Complete Title Services' loss mitigation division in Birmingham, Mich., said lenders move more quickly on the loans that are most delinquent and the larger loans.
Those who aren't usually as successful in getting a short sale are those who are current on their payments or have no hardship, she said.
"I don't take on someone who is just underwater," she said.
Other hardships she has seen go through include payment shock after an adjustable rate mortgage resets, failed business, incarceration, marital separation, military duty, retirement and damage to property.
Missy Caulk, associate broker for Keller Williams in Ann Arbor, Mich., said it always comes down to one thing: "It's really up to the bank."