question regarding how a short reflects

[Anonymous]

i am working with a seller in california who will be proposing a shortsale to his lender.  Indymac (or their successor)  has the first and the HELOC.  both are current and never late.

he has been approached by a "short sale negotiator" who claims that she can get the second through at a reduced payoff (something i can easily do) but ALSO get the lender to report to the bureaus that the loan is paid as agreed or paid in full, even after they reconvey for less than full value.   my BS detector is screaming.

is there any basis for her making that claim, can someone make that claim legally, can she make the delivery of payoff funds a condition of their agreeing to report paid in full when that is not true?  do i want to be any part of a transaction where this is a term that she is insisting on?

this smells fishy to me.

[gpeach]

I would think anything the "negotiator" could do the seller could do. The seller when he proposes the short sale just needs to ask up front. I did a short sale with my lender on a commerical property. The downtown went downhill and nothing was worth what people paid. I negotiated that I did not have to pay back the remaining balance and they reported it as paid in full. I did have to put the remaining balance they forgave on my taxes.