I've been working a short sale since Jan with a first (GMAC) and a second (Chase) which was set to close last Weds.  But Tues the home burned down in the Colorado Springs firestorm. The purchase price we had was $265,000 with the first getting $233k and the second getting $5k - all approved and ready to go. FC sale date is 9/26. My question is has anyone ever had a successful short sale using insurance proceeds to short the lenders? The proceeds at $277k are more than the purchase price we had and if we could get the lienholders to release the notes, it would be better because the second and the real estate commission would be settled as well. The seller became deceased after we were under contract and the family does not want to leave the pile of ash as a bank-owned property for the neighbors to deal with - even though it's a complete burn area many of the residents want to re-build there. If this were accepted, the family would wind up with the land and clean it up with other proceeds and sell later. Any insight or experience would be appreciated!