I'd be willing to bet that your seller has assets and is still keeping up with his payments. In their advertising, banks are all really nice people with gifts to give you. Then there is reality. So, why is it that your bank/investor feels that it would be better to take a loss on this house rather than to continue what is currently happening? If they are being paid, they have NO reason to take a short sale - their assets/loan is good. Or, if your seller has assets, they likely feel that he will keep paying and they can sue and get what is owed. Why purposely create their own loss?
Now, you cannot legally tell your seller to stop paying to get the bank to consider a short sale regardless of the FACT that it is the way to get a short sale - he can then turn around and sue you for "ruining his credit" and anything else negative which could result. The bank, of course, could have their own suit against you for you telling someone to NOT pay what he legally owes - and on and on. (Ironically, in a short sale, frequently the bank is 1st position will forbid the seller from paying "extra" to the 2nd lien, even though this is precisely the same thing - telling someone NOT to pay what he legally owes someone - yeah, I just love them bank ethics..)