Underwater in Phoenix: Real-Life Tales of Surviving a Short Sale

Scott and Shantal Murphy relocated to Phoenix in 2006 and bought a home in nearby Mesa, Ariz. for $325,000 at the height of the real estate market. By 2008, when the family decided to pack up and move to Texas, the home was only worth $225,000, leaving the family so far underwater that the only way out was a short sale.

Scott says that he and Shantel -- pictured left with their daughter, Macie -- were some of the first homeowners in Phoenix to request one.

It's no secret that the Phoenix real estate market has suffered more than most, but few outside the area realize how bad things have become. Some 66 to 67 percent of Phoenix area homeowners are underwater on their mortgages. A recent report by Jay Butler, head of realty studies at Arizona State University, shows that Phoenix still may not be out of the woods. Home foreclosures may be leveling off, but for the homeowners who have to deal with it, here's what they experience: conflicting advice, reams of documentation and hours upon hours of phone calls.

HousingWatch spoke with three Phoenix-area families who have experienced the short-sale process.