There is an interesting discussion going on over in the Forums about why some short sales don’t get approved.

One of the key points being made is that lenders will do everything they can to convince a Seller to change course and do a loan modification instead. In some cases, this can be a great thing for the Seller…maybe they get a better modification than they would have without the threat of a short sale.

Other times, as I have personally see, it only delays the inevitable.

One side note as well, Sellers in this position should be aware that a loan modification does significant damage to their credit scores.