Why do only 35% of short sales close?

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CNBC just came out with an article today stating that foreclosures are on the rise and that this is just the beginning. Please inform all of the realtors that you are working about this new information.

It stated within the article that only 35% of short sales that go into contract close. Why is that? I'd like your feedback on this low ratio?

Here are some the things I came up with in why that closing number is so low?
1. Bank of America has a horrible system.
2. HAFA is going to create havoc on the short sale markets
3. Any government policy with regards to loan modifications has been a mess and totally ineffective.
4. Realtors are handling the short sales the wrong way.
5. Attorneys are handling the short sale negotations the wrong way.

Bottom line if the government pushed back on the banks to expedite the short sale approval process with without the HAFA restrictions and as long as the banks are being reasonable with the short sale discounts we would be able to correct this market imbalance a lot more efficiently. This is just my two cents.

David H.