People think that you can't do a short sale if you're current on your mortgage payments, and that's not necessarily true. There are short sales that can be done when the seller is current. I did such a short sale through Wells Fargo for a woman who was retiring out of the area and could not sell her home. The investor for that loan allowed her to be current. I've closed other short sales in which the sellers were current. It all depends on the investor guidelines. Many cooperative short sales allow the seller to stay current as well.
Fannie Mae and Freddie Mac are supposed to allow the same thing, but so far I haven't seen it. Also, if a seller has been granted a loan modification, the only way to get out of that loan modification program and into a HAFA short sale, for example, is to default. But when a seller stops making payments, especially in Sacramento, that seller becomes an open target for hunting season among real estate agents who have started calling themselves short sale agents.
Read more in my personal blog today about Sacramento Sellers Hounded By So-Called Short Sale Agents.