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The "investor" is the entity that is owed money on the current loan.

Current investor perhaps, but there is also an investor into the new mortgage.

The approval by the investor is often where short sales get hung up and have delays. Because this approval is part of the selling process to settle the old loan, and not part of the lending process for the new loan, I still fail to see why this was cited as an example to show delays in "applying for a loan"...

From the OP: We received lender approval for the short sale quickly, but the file then had to be sent to the investor for its approval.

So the approval by the initial investor was quick, the holdup with the new investor looking to fund the purchase mortgage on this short sale.

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