Oh, here we go again… Realtors are screaming about the drop in sales of existing homes. I hope they’re screaming at the banks.

The pace of existing home sales in the United States fell two percent in March to a 4.93 million-unit annual rate, the National Association of Realtors said on Tuesday in a report that showed the U.S. housing market continues to struggle.

Why the banks you ask? If the banks weren’t dragging their feet to do what is needed, existing home sales wouldn’t be dropping so low.

Of the homes for sale, 18 percent have negative equity and so are either in foreclosure proceedings or headed for a ’short sale’ that will see the lender write off some of the original loan amount.

“This has been a frustration of our members,” said NAR chief economist Lawrence Yun. “Lenders have been dragging their feet (in approving short sales).”

I don’t know what got into those people that run the banks, but if I was running a bank and I had the choice of losing 100% of a $300,000 loan with no certainty of how much I would recover, or losing a set amount (like 25%, etc), I think I would go with the sure thing. Especially now, with the market the way it is. Maybe that’s why I don’t run a bank.

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