Seller's loans involved in a short sale can be Serviced Released at any point prior to the transaction closing and in most cases you will have to start the Short Sale over with the new Servicer. Plus the new Servicer may or may not offer an incentive to the Seller.
This can be devastating to a Seller who really needs money to be able to move and to buyers who may be in a time crunch and need to close on the home.
This appears to be a common practice among banks however, this practice can be detrimental to buyers and sellers as well as the housing market overall.
Please help stop the practice of service releasing loans in the middle of short sale transactions or after the short sale has been approved.