I am the buyer in a short sale transaction. After 6 months of constant back and forth, I was told last week by the seller's agent that the investor (US Bank) was not going to approve the offer because it was higher than the BPO and they didn't want to bother renegotiating the already agreed upon amount with the 2nd. He then advised us to rescind that offer and to submit a new offer at the BPO price with an additional amount allocated separately to the 2nd. Is this insane? This sounds insane. Why wouldn't US Bank just allocate everything above the BPO to the 2nd and be done? Now I have to go through the entire process again.... Something seems very wrong with this scenario. Has anyone had a similar experience?

On top of all this, I have been living in the property since May and have made improvements (new floors, paint, fixing broken things etc...) based on the selling agent's urging and repeated advice that the deal "would be closed in a few weeks, top". If it were not for this, I would have walked away months ago.

I feel like the selling agent purposely trapped me in this situation so that he wouldn't have another buyer walk away out of frustration. Am I being paranoid?

Any and all advice appreciated!