When something does not make sense, a good rule of thumb is to follow the money and see where it leads. When you find out which person in power is making money, you can then be pretty sure you can stop asking “why?”
So many people have been totally unable to get their banks to move on short sales and flat out cash purchase offers of underwater home mortgages, I have repeatedly wondered why it should be this way. Why would they want to lose money and not take a short sale vs. a frank loss?
Follow the money. I didn’t have all the information – the banks aren’t losing money on foreclosures, they are making money hand over fist. That right there also explains why they were having robo-signers rubber stamp so many loans into foreclosure: profit. The bank loses money, but it’s only a paper loss, and only until you consider that the taxpayer (read: your mom) turns the losses into profit.