HUD in 2nd position. Will HUD negotiate a short sale?

[Jason Krawitz]

Have any of you ever negotiated a short sale with HUD? I'm trying to help a home-owner stop their foreclosure. They owe 95k on their first mortgage and 25k on a second mortgage. Second mortgage is with HUD. The first is foreclosing with an auction date of 3/26. I'm wiling to buy the property for 105k. (15k less than total amount owed)

Any advice on how to convince HUD to accept 10k buyout of their 2nd position to make this deal happen before 3/26? My understanding is that HUD stands to lose all of their interest in the property if it does go to auction. Is that correct? If the house sells at auction on 3/26 will the 2nd position lender get anything?

Any advice? Experience? Thoughts? Thanks!