Banks accounting for unpaid mortgages as "income"?

There is a fundamental difficulty with regulating banks in the modern age. Unlike days past, banks often no longer derive value from tangible assets like gold and silver, but instead are number-engines creating value out of mathematics. That is not to say what they do is illusory - not at all! - but it means it is easy to game the system by tweaking the way the engine runs.

For example, Forbes is reporting that even after accounting-rules changes, many banks are still allowed to count mortgages as "income" even if no one is paying them... until the house is actually foreclosed upon. This means that banking giants like Bank of America and Chase can continue creating value from these properties (in the eyes of shareholders) even though they no longer have any real benefit to the company.

I can't help wondering if this explains a number of anecdotes I have heard of late from people trying to buy short sales (i.e. homes not actually foreclosed upon) where the bank showed very little interest in selling. After all, a sale is a real loss (assuming they sell for less than the mortgage is worth) whereas a continued unsold property is producing phantom income for the balance sheet.