My husband and I are first time home buyers. We are wondering how long are short sales taking?

If it makes a difference, there are 2 lenders (a home equity second) and this is a single family residence (no HOA) with a market value of around $850,000 (do banks, as they should, prioritize the more expensive properties/larger loans sizes?). Thanks for any personal experiences or knowledge or a pointer to any relevant, recent news reporting.

I made an offer on a short sale property. The house has a 1st and 2nd mortgage and is located in California. Banks are Bank of America and Washington Mutual.

We recently moved for family and employment reasons from Phoenix, AZ, to San Antonio, TX. We have only owned our home in Phoenix for two years, and in that time, it’s value has decreased by at least $80k. We have been offered the option of a “short sale” by our lender, but I don’t know what the tax implications of that are. What would we end up paying in taxes if we had a “debt forgiveness” of $50k from our lender?