You did not mention the reason that your brother wants to walk away from his home. Is he behind on payments? Is there a looming foreclosure? Has there been a change in his income? First of all I would advise that he NOT walk away from the home. He should first contact his mortgage company and see if he is eligible for a loan modification. If that is not an option perhaps a short sale would work for him. As a Certified Distress Property Expert, I help facilitate short sales everyday and can assist your brother. Many lenders are providing financial incentives to homeowners who go the short sale route.
I will tell you though, if he chooses are short sale, you would not be able to purchase the home as it must be what is called an "arms length transaction". So no relatives would be allowed to purchase the home. You also did not mention what your credit issues are but I would advise that you develop a plan, to work on your credit by paying off debt, paying down credit cards, and trying to establish new credit.
If I can provide you with any additional information, please do not hesitate to contact me directly. Take care!
Keller Williams Realty Signature Partners
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.