News flash for all real estate investors looking for the ultimate bargain! Fannie Mae, the nation's largest home mortgage lender, is making it easier to take advantage of "short sales" on houses in risk of foreclosure or already in the proceedings of foreclosure.

For those not familiar with "short sales", let me just say it has nothing to do with a drop in business. "Short" actually refers to the dollar amount at which a property is for sale is less than, or short of the actual value of the property or the outstanding debt on the property. In essence, the property is being sold "short" of the owner's financial goal. In fact, the difference is usually very short of the actual value, which creates the possibility for a very profitable turn for the right investor.

Fannie Mae is taking steps to shorten the process of ridding their portfolio of these types of loans, so a liquidation of the rock-bottom prices on these properties is imminent. This process, at present, is lengthy and can be very involved.

In actual terms, Fannie Mae will be pre-approving some of the short sale properties, which is a big departure from current practices. Bigger financial incentives in the form of commissions will be offered to real estate agents that broker deals between sellers and buyers.

In so doing, Fannie Mae is following the footsteps of its brother/competitor, Freddie Mac. Freddie Mac has been fast-tracking it's short sales and divesting itself of these mortgages in recent months, and have seen much success.

Freddie Mac's plan has nearly doubled the short sales it has processed last quarter, partly due to the limited documentation it requires of prospective buyers to take part in a short sale. The financial trade publication, American Banker, reported these data.

By now you may imagine the financial benefits and incentives to both of these mortgage giants in opening the floodgates to short sales. Simple stated, getting some of your entitled return now is better than getting your return much later down the road, or never. Also, ridding themselves of bad debt like foreclosed upon properties relieves them of the potential hassles in dealing with other parties wanting to receive their piece of the debt pie: banks that might have a second lien on the property, title companies, and property inspectors.

One astonishing piece of data published earlier this year cited that one in five American homes has experienced some sort of pre-foreclosure transaction. This could be in the form of preventative measures, or reactive steps to lower liability.

Opportunities for sizable returns abound for everyone in the scene, from small investors to realty brokers. It is important to keep an objective view and be patient, as these sorts of negotiations can be complex and lengthy.

The contentious atmosphere arises because everyone involved feels entitled to their piece of the action, but the overall pie shrunk when the selling price hit rock-bottom. This smaller pie makes everyone a little more intent on getting the most they can out of the deal, even if it means using means that may compromise another party's financial gain.

To look at some of the perspectives, just imagine each scenario. The mortgage holder, either a bank or the actual owner, is looking to get the most favorable appraisal to justify a high selling price. The short sale buyer is looking for the lowest appraisal to low-ball his bid. The listing agent is simply looking for a good commission, which usually comes from higher prices. And these are merely the basics without considering the myriad other considerations.

The most important take-away from this article for investors and agents is that Fannie Mae's short sale fast-track is ensuring a much more stream-lined process to see returns in your pocket even sooner. Because things are moving at a faster pace, more deals can be brokered, and everyone benefits from this activity, sellers and buyers alike.

For further updates on Fannie Mae rules on short sales , please visit https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf