SHORT SALE: Offer of $100K submitted but $179K is owed. Anyone ever got 1 approved by Countrywide?

The difference amount of short sale and the loan owed by you is considered forgiven and may be taxable as an income for you next year. If you let the house foreclosed, the bank may still go after you for the balance of the loan amount. Many people need to file bankruptcy after being foreclosed. After file bankruptcy, you won't be able to qualify any loan for 7 years. Try short sale first, cos' the government is thinking to waive that amount from short sale so you may not be taxed next year. Good luck.