This question came up in a seminar the other day with real estate lawyer Alexander Munn with the BPE Law Group here in California and the answer was this: "Short sales are not being declined due to lack of hardship. A statement of hardship is still required and can be addressed with a statement as vague as "I can no longer sustain the property". " The fact that you currently can make payments will help keep your credit relatively in tack even after the short sale is complete. I advise seeking out a good real estate lawyer in Arizona and pay for an hour of guidance before making your decision as well as consulting with a CPA regarding tax consequences.
We can walk you through the self-assessment to see if you qualify and then get you connected to a counselor to see what program will help you.
Melissa Schwartz, e-Pro
Realty One Group
Ethically, I do not agree with how the banking industry is handling distressed properties, but you can be assured it is driven by profit and numbers not so much hardship of home owners.
Feel free give me a call to discuss your options. Each lender is different on what they will approve, an not approve.
The Velasco Group
The statement "I can no longer sustain the property" (refer to Ashley's response below) is stating you can no longer make the payments. The lender will require your pay stubs, bank statements, investment account statements, etc to show you cannot make the payments/sustain the property. You do not have to be delinquent to have a short sale approved but the lender is going to want to see that you cannot pay/sustain the property any longer.