Is this legal and/or ethical?

[Marty Happle]

A friend of mine is behind on his mortgage and facing foreclosure due to an injury that kept him out of work for over 18 months. Someone offered to purchase his house if a short sale can get approved and lease it back to him with a chance to purchase it down the road. If this is legal, how would you be able to protect yourself from this investor taking the house?

[Phil Z.]

That's the workings of a mortgage scam.

And don't 'give the house back and move out'. They should stay in the house and try to work out a loan modification or short sale with the bank. With FHA loans you might become ineligable by moving out and not continuing to maintain the property.