Sunny the problem that you are most likely experiencing is related to the following:
– The BPO or independent appraisal came in to high such that the negotiator will not authorize the sale at the price you submitted.
– Same as above but the investors will not authorize the sale.
– Either the negotiator or the investors believe that they can get a better deal by either waiting for another buyer to come in, or moving forward with the foreclosure process.
sdr may have better insights into the short sale process but I believe that the finances of the seller have little to do with approval nowadays. If a seller doesn’t want to pay a mortgage there is not much a lender can do besides foreclose. So in short yes I have absolutely seen what you have said where the lender simply doesn’t accept an offer. Furthermore I have seen a short sale sit for months and months and months and my buyers have been quite frustrated that thier offer wasn’t accepted.
It can be a trying process. My advice is to hang in there. Also keep asking your agent to ping the listing agent to see if there is any change of heart by the lender. The listing agent may (or may not) be willing to continue to try to get your offer accepted. Depends on thier motivation level.
