Short sell interest

[Anthony Portugal]

hey everyone,
i've been reading up on short sales and had a question. I'm actually interested in a property that is on the MLS as a short sale. It's been on the market for 160 days now. Originally bought for $340,000 in '05. Now listed for $225,000 short sale, with multiple price drops within the pat 6 months. I did a public record search on the homeowner and did not see any default on the mortgage payments or notice of foreclosure. Now my questions is this....is it not true that banks will not usually agree to a short sale unless the seller shows distress in making the mortgage payments??? if this is true, and the homeowner is indeed making the monthly payments without much problem...why would the bank ever agree to a short sale??? if this is the case, would the seller have any hope of actually making a sale for less than what he owes on the mortgage?? (ie would he have to actually own this house until current market value catches up or something dramatic happens where he can't make the payments??) thanx, -Anthony