Was there legislation passed that allows "short sales" to occur even if the home owner is current on payments?

Please attach any article to your response. Thank you in advance for all your help.Was there legislation passed that allows "short sales" to occur even if the home owner is current on payments?Short sales were always "allowed" for being current......the catch is that the bank MUST approve them. That is a matter of the bank's decision and policy, NOT law. There is no law that tells the banks that they MUST approve a short sale for those who are current on their payments.Was there legislation passed that allows "short sales" to occur even if the home owner is current on payments?Ryan is correct. A short sale has nothing to do with whether a borrower is current on his mortgage payments. Although, some lenders do require the borrower to go into default for approval of the short sale. This shows that the borrower is truly in a hardship situation. It also allows the bank to charge more fees and be able to write off more of a loss when the short sale goes through.