A haircut and a shave
Did you ever wonder why lenders with lots of problem loans on their books aren't more responsive in helping troubled borrowers. Sure, there are technical financial difficulties because loans were packaged and sold and nobody has any idea who actually owns the mortgage any longer.
Yet ... when the borrower gets in trouble and then possibly puts their home on the market to avoid foreclosure by trying to sell in a potential short sale, lenders have generally been very difficult to work with in order to get the home sold. If they were smart, at this point they might take a haircut on what they were owed.
But instead, because they didn't, in most cases the property eventually winds up in foreclosure and the lender ultimately gets a shave.
While they might have had a little bit of hair taken off the top by dealing with a short sale, the net payoff to a lender from a foreclosure is more like a very close shave.
Photo courtesy of Flickr by Mr. T in DC