puzzeld - low LTV house sold to 3rd party

[Kevin Du]

I'm very new to foreclosure investing and really want to learn from you guys here. Here is a case I ran into today and was puzzled by the course it took.

* SFR in SF bay area, specifically in an area where housing price has been holding up quite well
* at 12/09, house est. value was $1.1M, loan $470K, equity $730K.
* NOD 5/7/09
* NTS 9/21/09, starting bid $27K, sold to 3rd party for $190K

Can some one help me to answer (or speculate),
1) Since the owner had a large equity amount, why didn't he short-sale it, say for $800k, and still could get $330K, vs loosing it all. As aforementioned this is an area with housing price declined at most 20% from the peak, so selling at this level of discount should have been no problem.

2) Why the NTS starting bid was so low, compared to the loan amount.

Thanks!
-Kevin