I must stop making payments before a bank will approve a short sale
This is less common than it used to be, however there are sellers whose short sales were denied because they were current on their payments. However, it is not necessary for you to stop making 
payments for the bank to take you seriously and have a successful short sale. It is important to do a little investigation up front.
It is also important to understand that in fact, failure to make payments will ding your credit report for each month your mortgage payment is missed. It is understandable if you are financially not able to, but it is important that you do not stop because a friend or family member has suggested you do so. Investigate the consequences of this prior to making that decision. What the bank needs to see is a true hardship and reason why you are unable to continue making your monthly payments and /or must sell because of loss of job, relocation, divorce, etc. Short sales are very prevalent and due to current market conditions the banks generally understand why you are requesting to participate in a short sale, whether you missed payments or not.
