Can the bank short sell to me??

[Jason Green]

I am a builder and I have one house left in inventory. I have been paying the construction note for 3 years. My uncle is now renting the house but due to a tax lien, the plan of him buying in a short sale has fallen through. The bank is willing to do in the words of the banker, "whatever it takes to not get the house back". I can get a mortgage no problem for what is owed and just rent it to my uncle who is a very solid tenant. The problem is, I owe 227k and its only worth about 195k. From my understanding, the bank cant short sell it to me because in the words of my lawyer, its not an "arms length transaction". I would gladly take 195k mortgage and rent it to him until its paid off but I have no interest in the house at what I owe. Any suggestions?

[Jon Holdman]

Why do the short sale at all? You're only slightly underwater, less than 15%. Just hold on to it and keep renting to your uncle. Maybe things get better in a few (or five or ten) years and you can sell without taking the loss.

Perhaps you could convince the bank to reduce the principle on the loan and in exchange you take a personal long from them for all or part of the difference.

If you're just trying to eliminate the excessive debt over the value, you're going to take some pain and your uncle may end up having to move.