Participating servicers (lenders) MUST evaluate for HAMP (the modification program) prior to any consideration for HAFA (the short sale program).  

So yes, even if you are trying to request a short sale on your property you WILL have to go through the evaluation for a loan modification.  If you are ready to start this process now click here which will take you to the government's website, then follow the instructions.

How do I know if my servicer (lender) is participating in the Making Home Affordable Programs?

The list is here.

What else should I know before I start?

1. This has to be your principal residence
2. Your mortgage has to be originated before January 1, 2009
3. Your mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac
4. You are either delinquent in your payments or becoming so is foreseeable
    (less than three months mortgage payments in the bank)
5. You can demonstrate hardship (there are many conditions for hardship)
6. Your total monthly housing payment exceeds 31 percent of gross income. (This includes
     principle, interest, property taxes, hazard insurance, PMI, second mortgages)
7. Your unpaid principle balance does not total more than $729,750.00

Will your debt be forgiven?

Although the Making Home Affordable program has sought to insure that debt forgiveness is part of the program, we have been advised that certain lenders demanded "carve outs" when they signed on board as a participant to the this program. 

Translation, you may not have your debt forgiven, do not assume you will! The only way you will know for sure is when they issue your approval letter.  Even then the letter must be carefully reviewed to insure it is the debt being forgiven, language is critical!