The main reason is that they are simply swamped. My understanding is that some managers have case loads to 250-300 files and they are working to the best of their ability.
You just need to be patient. Having a good listing agent is helpful. Have your agent stay in touch with the listing agent on a regular basis.
In many areas it is a declining market, you could make it to approval and then find you can't get loan approval because it won't appraise. Short sales are very difficult for buyers... I am surprised buyers do it at all.
This is the 64,000 question. We placed our bid in Jan and at the begining of Feb the bank send a letter indicating that the short sale packet was completed and we should hear word within 30 days with closing to be 10 days after acceptance (we anticipated closing somewhere mid to late March). Well in April the bank notified all that they had really not even looked at the offer and it would be at least 2 to 3 more months till they even responded and "don't bother to call us, we will notify you when it is completed" as they are swamped with short sales... Needless to say we got out of this deal and found a home (not short) and will be closing the begining of May....
The short answer is that no one was prepared to handle this volume and the banks did and will not hire specialists in loss mitigation. There have been no governmental guidelines until recently, which will become effective in March/April 2010.
Currently each time an agent inquires about the property they are directed to whomever is available to answer the phone. It's difficult to develop a repoire with someone at the first contact, but not impossible.
We all hope the guidelines will specifically speed up the transaction time and I have often wondering if an above asking price were submitted that an answer would be produced quicker.
There are many possible reasons for a delay or a long wait, some of them have already been mentioned. The main one is probably they are swamped with files. There are so many variables. It is a process and every step of the way there can be miscommunications that is why it is very important that the listing agent is all over the process. When you submit the short-sale package, it has to be complete, then in some cases it can take up to 2 weeks for the file to be acknowledged by the bank. If any of the required documents are missing, it will be rejected by the bank and the offer and the process has to start all over again. The listing agent has to follow up with a phone-call after faxing the package out to make sure it is received. Just because it was faxed out does not mean they have it. Next phone calls have to be consistant until it gets assigned to a short-sale negotiator. They then have to review and negotiate or approve and process. I have had great success with short-sales and once a negotiator is assigned, the main thing is the communication. If someone is just waiting to hear something without aggressively contacting the bank, it is definitely going to take longer. Contact the listing agent and find out where in the process you are. I hope it is a good deal for you. If it is, it is worth the wait.