If a bank denies a short sale based on incorrect information (i.e. They wrote the wrong number down for my income and made it look like I had an extra $1000,00 a month) what legal recourse do I have? I have all the documents I sent them clearly stating my income per month. My point of contact has said that it looks like a mistake because the income report suddenly changed from one report to another but there is nothing he can do about it because another department handles the decisions about whether a short sale is approved. I have a buyer willing to buy the house for fair market value but it getting ready to walk away because of this mess.

Legal Re course? You have none. The bank is not required to approve a short sale. Your only recourse is to take up the line to get the bank to review and reconsider.

You send back your info ( you write your earnings down) and ask them to redo the paper work as it was in error. They are not required to do a short sale even if you meet the requirements,