So sorry to hear of your plight M. There are many things you can do. First of all, look up your paperwork where you bought the property and see if i is a fannie mae or freddie mac loan. They are doing special mortgage mods right now to help people stay in their properties, especially those like you who have a special situation with your job loss.
The next thing to do is see if you are going to be able to get another job in the near future - if so, then you might be a great candidate for forebearance (where the lender lets you skip some payments and adds them on to the back end of the loan).
If you DO have to do a short sale, I would recommend using an attorney or an agent who is experienced in short sales, don't try to navigate this on your own as it is very complicated and most of the lenders don't hire people who know the laws either.
And last but not least - Mr. no $ down gave some very bad advice. He must have had a bad experience with a Realtor in the past, but there are good and bad apples in everyone's cart. If you check his profile out and look at the comments he has made, it is very evident that he is anti-Realtor. That is a shame because for the most part we really are good people who try to help people as best we can.
Telling people not to use a buyers agent and save the money is one example of tvery bad advice. Just because you go to the listing agent yourself does not mean you'll save 3%, in fact, since you also have no advocate on your side and the lack of knowledge legal, paperwork, etc. you could very well lose a lot more money than the 3% your hoped to gain.
Buying a house is one of the biggest investments one makes in their life, and you need a buyers agent (or an attorney) to navigate you through this complicated transaction.
I don't work with buyers, I only list property and market it to sell, but if someone does email or call me and wants to buy the house, I refer them to another agent or an attorney so they can get the representation they need.
I hope Mr. no $ down will meet a good agent one of these days and I'm very sure that whatever industry he works in, he also has good and not so good people in it as well. I will never recommend someone go it alone when buying or selling a home and spending that much money on their own without the knowledge or expertise that a REALTOR or attorney has.
Just as Doctors don't operate on themselves or family, Attorneys who represent themselves have a fool for a client, someone who tries to navigate the real estate market alone is also making a big mistake. The most important consideration when hiring a Realtor is to see how much experience they have, were you referred to them by a friend or family member or pick someone at an open house? How do you communicate with each other? You need trust, faith and communication with each other or things can turn out badly.
Good luck M on your ordeal, if you would like to bounce some idea's off as to your options, feel free to email or call me.