Your answer can be very short and sweet. You can simply write that you do not contest the foreclosure.
However, I think the best course of action is to request an "extension of time" from the court for an additional 30 days. That way it will keep you from having to do anything substantive before the sale is completed or rejected.Ask a similar question
In my experience the approval/rejection process for short-sale can take much longer than the time period they give you. Instead of filing an Answer, it is better to file a Motion to Abate/Stay Foreclosure Proceedings for Pending Short-Sale Negotiation. It gives the Court notice that you are interested in the outcome of the case and that you want the Court to delay the foreclosure as long as possible in order for you to get that short-sale.
Make sure the short-sale agreement has some language in there that specifically waives the lender's right to come after you for a Deficiency Judgment. Or else you're on the hook for the difference if the house value is less than the balance on the mortgage.Ask a similar question