Due to lack of lender cooperation or delays in approving short sales- the US housing market has lost billions of dollars in property values,caused additional unemployment, strain on local tax revenues and more homes going into foreclosure.

There are billions of dollars' worth of short-sale contracts sitting in lender offices, for properties they end up foreclosing on.  Lenders turn down short-sale contracts and sell properties eight months later for 40 percent to 50 percent less. It is the definition of insanity.

Rather than giving money to lending institutions / banks without stipulation - perhaps taxpayer money should be  tied to how many short sale offers are accepted.   Then perhaps the institutions would spool up personnel in those departments.   Perhaps the TARP (Troubled Asset Relief Program) money should be used to hire out-of-work mortgage and financial people to get the short sales ramped up and cleaned up?

Bank owned (REO) properties are killing property values.  Good for our buyer clients of course -- (we've been involved in several multiple offer situations lately on deep-discounted bank owned property - with my clients getting the properties at tens of thousands less than the appraisal came in at....

But - we the taxpayers, are handing (banks) money so they can perpetuate the problem. They are taking billions of dollars on one side, and on the other side they are throwing billions of dollars out the window, ruining home prices by not accepting short sale ofers due to understaffing and poor standards. 

When the alternative is a bank owned property - where you can get an answer back within 24-48 hours versus 3 months or more - and the price is much less than any lender would accept for the short sale properties nearby  - the bank owned properties become preferable to home buyers.