I have seen some success in contacting the company that is handling the foreclosure. This company would be indicated in the Legal Notice that was published in the legal news and also postedd to the property. If you have a viable offer you can request in writing an extension to the redemption period. They are usually willing to work with you because it is more cost effective for the lenders they are representing to extend the redemption period rather than complete the foreclosure and evict you.
You gotta work with the bank on this one. I would think it would be in the bank's best interest to close on it and avoid the added expenses of evicting you and your husband AND potentially re-marketing the home. At the end of the day it may not be Flagstar's call as Fannie Mae is the investor (the true owner of the loan) and with all the turmoil over there I doubt Fannie has the resources to make a quick decision.
If it falls through then you just have to feel good that you TRIED to do the right thing and it was out of your control. It's probably not going to make a difference to your credit either way. Your credit is shot for the time being anyway and any lenders in the future will look at things the same regardless of whether you "technically" had a foreclosure or not.