These are 3 main problems why Short-Sales are getting more difficult.

1. Most solutions, such as Forbearance, Deed-in-lieu of foreclosure and short-sales require lender approval and negotiations. However, as David and Bill point out, many lenders are shutting down the lines of communication.
2. As Lynn Frantzen points out in "Short Sales and mortgage insurance" , If a lender has mortgage insurance such as PMI , (Private Mortgage Insurance) they can collect money on insured loans if the home is foreclosed upon.
3. Finally, Mortgage insurance companies and Lenders , in a sense, denying short sales by aggressively insisting that the deficient monies be paid back. Read Brain Brady's Guide to the effect of mortgage insurance on short sales.