Because they lose money on it when they do. Would you like to give up $100,000? I doubt it and a bank is no different. Often they will foreclose so they can take over the house, move out the ex owner who defaulted on payments and then decide what to do. Other banks like the short sale approach, but in either case there is a loss to the bank and no banks likes to lose money. Some owners try to short sale their house while still making payments and the bank just ignores those offers since they are being paid the mortgage each month. You, as a potential buyer, will have no idea if the owner is current or behind on payments and often the sellers listing agent won't know either. It happens and those situations drag on for months sometimes as the bank just ignores the offers. I feel listing agents should have bank approval to short sale a house before it is listed for sale, this would prevent owners from trying to short sale just because the house is worth less than when they bought it but still current on payments.