This is an interesting question. Usually in a short sale, the bank will request that a signed "arm's length affidavit" be submitted so that the seller is not selling to a relative. However, it may just depend on the individual bank as to whether they will accept this. If you have an experienced short sale negotiator or real estate attorney, I'd ask what they think. Also, an experienced lender may be a good one to confer with.
I'll be looking forward to seeing how this plays out. Good luck!... more