Your question seems simple, but the complexity of the laws should steer you to proper and timely legal advice.
Note: this is not legal advice and any decision you make should include professional counsel in the foreclosure area. If you wish to have the name of an attorney please let me know.
A short sale is an eventuality for some properties. When what the market will yield for a property is not sufficient to payoff the amount due at a closing, a short sale may be the solution. The bank may agree to take less than is owed in order to avoid foreclosure proceedings. In my experience, the outcome is usually much more positive for all parties.
In any event, before you let the property just slip away, you should consult with an attorney who specializes in the process and can help you navigate your way to the best outcome.