Trustco Bank does not accept short sales?

Hi Everyone

I was in the process of preparing a short sale package for a client who has two mortgages on their property: Chase is the first ($105k) and Trustco Bank is the second ($48k).  I have an offer on the property for $90k, which is a reasonable price based on recent area comps.

I called Trustco to check on their short sale package requirements and was told they do NOT do short sales! Apparently, it is because they do not have government backed loans, and therefore, did not get any of the stimulus money that would allow them to offer short sales or even loan modifications. I have never heard of this and cannot find anything about it through an internet search.

Has anyone had this experience with Trustco, or another bank, not even considering a short sale?  Does anyone know of any exceptions to this policy?  Your feedback on this is greatly appreciated.  Thanks in advance!

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