Not too long ago, I had the pleasure of representing a Northern Virgnia Short Sale Seller who was anticipating a loss in income due to their impending retirement and subsequent move closer to aging parents. The Seller was never late on a mortgage payment and the house was immaculate.
The hardship letter stated the impending circumstances. The Seller's circumstances were due to change six months from the writing of the letter and listing of the home. Just enough time to get the Short Sale under contract and in for processing. Unfortunately, it didn't get approved. Why? The Seller currently makes too much money and there is no current hardship. 
Showing the near future to the bank didn't make a difference at all.
The Seller was told to try again once the financial hardship actually hit. In other words, "Let us know when you've retired and moved, even though it's only a few months away." Great business decision on the bank's behalf (I say with sarcasm.) Now the bank has incentivized this responsible home owner to consider dropping the keys in the mail and leaving the house vacant until the bank can figure out what to do with it. Nevermind that his offer was GREAT! Best price seen in the neighborhood in many months. Nevermind that the price in the Short Sale just rejected by the bank will not be the same offer the bank gets once the home is vacant and doesn't show as well. Nevermind that the market will lose steam if all these predictions come true about unemployment and such.
Perhaps the bank would like to see this Seller work their fingers to the bone, forget their aging and ailing parents, and stay put just to keep making the monthly payment on time. That's not going to happen. The Seller will retire and move closer to family to care for the parents. I guess once a few payments are missed and the balance sheets are really screwed up that the bank will sit up and take notice. They'll probably even bitch that this Seller waited too long to try a Short Sale.
This is the first outright Short Sale Rejection I have seen in my experience as a Northern Virginia Short Sale Listing Agent since 2007. I'm sure it won't be the first as we wade through at least the next few years of retiring home owners under water and trying to do the right thing.
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