What to do with the loss mitigation package?

A home owner was to 1st fill out his "loss mitigation" package, then list the home with a Realtor...?

This was to set the "short sale " process in motion. After it was listed I was to place a bid, and the appraisal would take place. The owner has decided that he is going to be the listing agent. Is this a valid approach in the eyes of the bank? Can a home seller be the "listing agent?"

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