A follow-up to the list: we closed today (Jan 14th) almost 4 months from our original offer without difficulty (except for a dose of winter in NW OH).

We believe the primary difficulty came from lack of understanding (trust?) of any relationship between CW and Bank of New York by the title insurance underwriter. Our old-school, semi-retired attorney, based on his reading of the Commitment for Title Insurance had been adamant from the start that the seller should have been negotiating directly with BoNY rather than CW -- CW had nothing to do with this deal in his opinion (which, of course, was wrong, but we kept him on anyway). So when the CW acceptance letter came, our attorney likely made certain that he underwriter at the title company followed through on this. Another realtor specializing in short sales suggested to me immediately following the Dec 30th postponement that the firm/attorney handling the foreclosure for BoNY/CW was the key -- it took the title company 10 days to figure this out, and then got it wrong. Based on information from the seller and her realtor, we got the title company talking directly to the foreclosing attorney's office, and within the hour, our closing was scheduled for the next morning.
VA Loan Guy is correct about the CW standard acceptance letter and their servicing agreements with investors (and we had no reason to not trust it). In our case, however, a conservative title company didn't trust this CW/BoNY relationship until that relationship was explained sufficiently by the foreclosure attorney (or so we believe).
One more point: based on earlier posts here, I sent an e-note off to ken.d.lewis@bankofamerica.com explaning our difficulty in getting the title company to accept the acceptance letter on its face. After some more research, I came across a few more e-mail address at Countrywide, and sent similar messages late last week, then again on Monday. 20 minutes after our closing was scheduled, I received a phone call from someone claiming to be in the Office of the President at CW, telling me that they had also been in contact with the title company closing agent, and gave me her direct number in case there was any further difficulty with the closing. I don't know what communication prompted that action, but I did find it interesting.

All more than a little frustrating, but, in the end, we made it work out.

Our CW buying story to date: Signed PA on 16 Sep 2008, closing for mid-Oct, cash sale. Only vague dialog with seller's agent through Oct., ours only serious offer for the vacant house. CW negotiator not assigned until 31 Oct. Talk of a BPO in early Nov. 2nd mortgage settles verbally for 5k on 25 Nov. Verbal counter offer from CW on 10 Dec for 10k over our original offer. We amend our original PA to reflect the CW's verbal counter and 2nd's settlement on 15 Dec. 2nd sends agreement letter on 15 Dec (good til 15 Jan), CW sends their agreement letter on 19 Dec (good til 19 Jan) and closing is scheduled for Wed, 31 Dec. All is well. Call from our atty on Tues: the closing is postponed indefinitely. The title insurance underwriter doesn't like the CW agreement letter apparently. CW only services the mortgage, Bank of New York bought the debt in Feb 2008 (they're not the original lender) and has filed foreclosure against the owner (though not served). CW letter doesn't say explicitly anything about Bank of New York releasing its lien or dismissal of the foreclosure suit. The intervening New Years holiday doesn't help and we lose more time. And now the title agency won't close until it gets something (they won't say what exactly) from CW. Is the title agent asking for something they (and we) will never get? Could we lose this because CW doesn't own the mortgage it services? Any suggestions on how to move this toward closing? The clock is running out on us and this property.