Is there any deals to be made on pre foreclosure with no equity?

[Joey Chrisman]

I have seen a decent amount of flipper houses go into pre foreclosure lately in Phoenix that were purchased at the top of the market.  These houses loan balances are too high to make any money on a flip buying it for the loan balance owed.  In 2010 these houses would just go to the auction block to be liquidated in no reserve auctions as the banks didn't care what price the assets sold for then.  I doubt the lenders will do that this time and they will more than likely open the bid for the balance owed and there will likely be no bids and they will take the house back.  So I'm guessing the best strategy may be to just wait for the lender to take the property back and then contact the lenders to see if they are motivated to get it off their books?  The only other strategy I could see would be a short sale but I don't really see the benefit of the short sale to the lender as I doubt the foreclosure process costs that much in scheme of things and the trustee would have to sign off on the deal as well in addition to the lender.  Am I missing something here?