During a December 15, 2010 House of Representatives Judiciary Committee Hearing, Representative Bobby Scott [D. VA] asked those testifying if there was anything in "accounting standards" that was causing the mortgage industry not to accept ‘short sale offers’ and to seemingly prefer going to foreclosure. No testifier apparently knew of the impact the delay in the implementation of mark-to-market accounting [FAS #157] has on loss recognition accounting; but Thomas Cox (an Attorney in Maine) explained another reason for the apparent rejection of 'short sale' offers.
You might want to review another article and video posted here, to see the context and the actual question asked by Representative Scott, see “Zombie Accounting and The Shadow Inventory” at: http://billsplace.posterous.com/zombie-accounting-and-the-shadow-inventory