There are many resources a person could turn to in order to learn about short sales. The FDIC, Freddie Mac, Fannie Mae, and state housing agencies all have educational resources available. Also, banks often provide resources, but be careful because banks are in the business of selling mortgages and other financial services. You have to understand that just about everyone in the financial services world is marketing themselves in one way or another, so be aware.
Sometimes, especially during the housing crisis that began in 2007 or so, borrowers can get over their heads with their debt obligations and become simply unable to pay back their loans. A short sale can be a way out of this mess. The lender or bank will be willing to consider a short sale application only as a last resort before foreclosure.
For a lender, a short sale is making the best of a bad situation: either the lender accepts a short sale, or the homeowner completely walks away from the mortgage (that is, stops paying, permanently) and the bank is stuck owning a vacant house. The short sale can be a slightly better (though still bad) solution.
So if this unhappy situation arises, the borrower (homeowner) may contact the lender and explain how they just cannot afford to pay anymore. The lender may decide to begin the short sale process.
Unsolicited editorializing: Let’s just remember bankers are the ones who created and pushed through these inappropriate mortgages in the first place. In this author’s humble opinion, the scale of blame tips decidedly toward the financial industry, who made a helluva living selling mortgages, mortgages, mortgages.