Jennifer Viner, Remax Pinnacle Group
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Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Unfortunately, you wouldn't be allowed to purchase the house under most banks' rule because that would not be an "arm's length transaction"--you are too close of a relation to your grandmother.
Since you say that you can't pay the mortgage, I would say that your only options are to have her short sell or foreclose.