Loan modification with short-sale

if a homeowner wants to do a loan modification and the bank accepts it but the modification isn’t enough is it alright to do a short-sale right away. basically the bank is going to give them a loan modification in the next few days but they say its not enough so they still want to do short-sale.

is there a risk that the bank will cancel the loan modification? I am a bit unsure because i never heard of this situation before. I guess they are worried that if they are granted the loan modification, and then attempt a short-sale and the short-sale fails that the loan modification might be in jeopardy. Any input would be appreciated.

A short sale is nothing more than an offer for the property. It just so happens that because the offer is for less than what the lenders are owed, it is knows as a short sale offer vs. a regular offer.

Making an offer on the property has absolutely nothing to do with the lenders decision to modify the loan. They will modify the loan because they believe it to be in their best interest to do so. They will accept a short sale if they believe it is in their best interest to do so.

My suggestion, submit the short sale. If they do not accept it then there should be no reason for them to do anything other than not accept it. If they say yes, then the property sells and the loan modification is null because the loan would be satisfied at closing.