I've been in a number of discussions lately with people about short sales, and the motive of the banks. It's not easy to figure out what "the bank" wants (any bank), even when they tell you, because the answers seem to be always changing, but I thought this was an interesting article from the Wall Street Journal to pass on...

Why Lenders Are Leery of Short Sales
Wall Street Journal (04/17/08) P. D1; Simon, Ruth; Hagerty, James R.
The National Association of Realtors says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals. Research from Clayton Holdings Inc. reveals that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors and home-equity lenders--a process that can take several months to complete. Mortgage servicers blame delays on staff shortages resulting from the unexpected rise in problem loans, and Mortgage Bankers Association senior director Vicki Vidal points out that pricing also poses a challenge because buyers are making low-ball offers on distressed properties. While servicers prefer rep ayment plans and modifications to short sales, the process is getting easier for borrowers who are encountering financial difficulties but continue to make timely payments. Additionally, Fannie Mae and Freddie Mac both are taking steps to speed up the process, with Fannie Mae looking to make acceptable minimum prices known beforehand and Freddie Mac giving servicers more leeway in approving short sales.