Our answer to this question may well not be the same one you get from other agents.....our legal advisors for the short sale portion of our practice...smaller portion...but a portion none the less...is...."as few people as possible."
The Approval letter does NOT go the loan "officer"...to the Buyers or anyone other than the Underwriter on the buyer's side of the transaction. When the short sale is approved, we send an affidavit, written by a member of our legal team, that says that by signing it, they are agreeing to protect the privacy of the Sellers with the information that they are being provided with the approval letter. Further that the lender, its assignees and agents will be held strictly responsible for the misuse of this information. In reality, and in the very beginning of short sales, not even the Underwriter asked for the letter...the title company is giving the Buyer clear title which means of course that all liens have been released from the property. The Underwriters "union" (I swear there is one made up of people feeling it necessary to insert their ego into as many transactions as possible,) decided one day that the approval letter was one more piece of paper they required for their pile...and for us, not without their signature on our affidavit.
Short sale Sellers have been through enough turmoil, anxiety and stress without adding identity theft to their trouble basket. It's one of the protections we offer and a dignity they deserve, they have elected to do the best thing they can in a bad situation.
If you or anyone you know is no longer able to pay their mortgage for reasons of hardship, call the Hansons...if you do not live in southeastern Wisconsin, we will refer you to a qualified agent in your area.
This has been a public real estate service post brought to you by Sally K. & David L. Hanson, broker associates with Keller Williams in southeastern Wisconsin.