You really need to be talking with your lender about this. In general, reduced income is a compelling reason for a lender to allow a short sale. Their motivation is to prevent a foreclosure, which is more time consuming and expensive than a short sale. When you speak with your lender, be sure to emphasize how much less you are earning, and that you likely will be defaulting soon. Some lenders will not entertain a short sale if the mortgage is current (figuring if you’re paying it, you must have enough money one way or the other), but I wouldn’t recommend intentionally defaulting if you can avoid it. Call your lender, ask to speak with the short sale or preforeclosure department, and see what they say. Keep in mind you will have to prove how LITTLE you are making, kind of the reverse of getting a mortgage where the emphasis is on whether you can afford the mortgage, you’ll have to prove you CAN’T afford it. Hope this helps!