Seller has to be behind in payments in order to short sell?

 Just got a listing where sellers have to relocate. Purchased in 2006 with two loans from HSBC (80/20) equal 100% so no way can they sell and pay off mortgage.  They are current on both loans. First is a Fannie Mae.  HSBC is telling me they will not consider a short sale or evaluate a contract unless sellers at 35 days past due.  Is this everyone else's experience?

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I have not personally been in your position - I think I've never had a short sale where the seller was not behind.  There are some banks which will consider a short sale if the seller is not behind.  What usually drives me crazy is that we are not allowed to tell sellers that they need to be behind to get the bank's attention - makes us quite sue-able..

This makes sense - if someone owed you $200K and was paying you on time, why would you want to say, "OK, please let me stop being paid and take a loss for $100K."  Also, banks love to see borrowers in pain.  Your seller isn't behind, not a blip on his credit - hmm.. maybe he's not hurting as much as he says.  Must be faking so just keep paying on time.

I'm glad, and surprised, that someone at a bank actually told you that the seller needs to make it apparent to the bank that the bank has a problem.

It's a Fannie Mae thing.  Yes you have to be behind with Fannie Mae to be considered.

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