The Bank of America and GMAC are firing up their formidable foreclosure machines again today, after a brief pause, but some hard-pressed homeowners are asking why lenders often balk at a less disruptive solution: short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage, according to an article by Michael Powell in today's edition of The New York Times.

The halt in most foreclosures the last few weeks," the article said, "gave a hint of hope to homeowners who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation."

But "some major lenders took a quick inventory of their foreclosure practices and insisted their processes were sound," the article continued, adding that "They now seem intent on resuming foreclosures. And that could have a profound effect on many homeowners."

In Arizona, thousands of homeowners have turned to short sales to avoid foreclosures, and many end up running a daunting procedural gantlet. Several of the largest lenders have set up complicated and balky application systems.

"Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually," the article said.

Short sales are also hindered when homeowners fail to forward the proper papers, have tax liens or cannot find a buyer.

Because of such concerns, the article said, "homeowners often are instructed that they must be delinquent and they must apply for a modification first, even if chances of approval are slim. The aversion to short sales also leads banks to take many months to process applications, and some lenders set unrealistically high sales prices - known as broker price opinions - and hire workers who say they are poorly trained."

As a result, the article said, "quite a few homeowners seeking short sales - banks will not provide precise numbers - topple into foreclosure, sometimes, critics say, for reasons that are hard to understand."

Homeowners, advocates and realty agents offer particularly pointed criticism of Bank of America, the nation's largest servicer of mortgages, and a recipient of billions of dollars in federal bailout aid.

The bank instructs real estate agents to use its computer program to evaluate short sales. "But in three cases observed by The New York Times in collaboration with two real estate agents, the bank's system repeatedly asked for and lost the same information and generated inaccurate responses. In half a dozen more cases examined by The New York Times, Bank of America rejected short sale offers, foreclosed and auctioned off houses at lower prices," the article said.

Short sales, to be sure, are no free ride for homeowners. They take a hit to their credit ratings, although for three to five years rather than seven after a foreclosure.

In a different article in the same edition, Nelson D. Schwartz wrote that "even as Bank of America begins to restart foreclosure proceedings in 23 states on Monday, the bank confirmed that it had discovered errors, including incorrect data and misspelled names, in the paperwork it has reviewed."

"On Sunday, the bank revised its fairly combative public stance. Bank of America had found errors, but only in a tiny number of cases, Dan Frahm, a spokesman for the bank, said late Sunday," the article continued.

As a result of its review, the article said that Bank of America has combined signing and notarization into one step, unlike in the past, when they were separate tasks.

On Sunday, Bank of America maintained that no homes were foreclosed in error.