In today's market, short sales are very popular, it is when a house is for sale at less than the current mortgage. In a lot of cases the home owners have a hardship that is not allowing them to continue to make their current mortgage payments, and their lender nas denied a loan modification so the house is now for sale for less than the current morgage amount.

For example, a homeowner bough a  house a few years ago for $200,000, the mortgage loan is currently at $190,000. The homeowner had a hardship, loss income, divorce, relocation, an acident, etc. and can't not make the monthly payments, the bank wont give them a loan modification so they will contact a real estate agent to list the home at market value.

The current market value of the home is $135,000, the house will sell for that amount of a little less, with the approval of the lender holding the mortgage note. 

If you are behind in your mortgage payments due to a hardship, you should contact your lender and talk about your options, the first option we recomend it to work a loan modifacation. This will allow you to stay in your house and lower your monthly payments, if you need help with the paperwork and transaction I recomend to seek the advise of a housing counselor or non-profit agency. There are several loan modification companies, just remember that you don't have to pay up front for their services, it is agains the law for those companies to charge fees upfront.

If the terms of the loan modification are not favorable or acceptable for you, or if the lender denies the loan modification then a short sale might be good for you.