Loan was charged off can I proceed with short sale that was in progress before loan was charged off.

I spoke with rep. from lender they said they would not be foreclosing due to value in home. He went on to say company will be spending more money for proceedings and probably still could not sell it. He said the home is really yours, you are still responsible for the taxes.

So if it is mine, can I still short sale and work out deficiency balance with company later.