Years ago, before I became a realtor, I was a computer audit specialist in the banking industry. While it may seem intuitive that you should be able to negotiate with a bank in advance of a property going into forclosure to save the bank and yourself as a buyer money, it's not always that simple. A large share of the "owners" of mortgages are individuals and institutions who have invested in mortgage backed securities. These securities may be held by a mutual fund and technically, thousands of people may be the "owner" of the mortgage. Banks often fill the role as "servicers" of loans, collecting the payments and making the disbursements as needed. It's not uncommon for the bank who is doing the servicing to be doing this for a third party owner, and the loan is not in this bank's own investment portfolio. So the problem is that there may be no one to negotiate a short sale with in many cases. The servicer does not have the authority to alter the terms of the loan in most cases so everyone is stuck with what the terms are in the mortgage contract. As a result, short sales are very difficult in practice to accomplish. However, in this case, if the seller has equity in excess of the mortgage, you may be able to buy the property from the current owner for the mortgage value. If you can find out who actually owns this mortgage, you may be able to negotaite a short sale in lieu of a foreclosure. Best wishes.