Homeowners may consider starting a short sale process when a mortgage loan is higher than what the real estate property is worth.

A homeowner has attempted to refinance, and the lender (s) is /are unwilling to work with the homeowner because the loan is upside down.

Or, in some cases, the homeowner has had a hardship; thus, fallen behind in his mortgage payment or other payment. Therefore, the creditor reported non-payment or late payments to the credit bureau; consequently, lowering the FICO score.