Tricky HELOC situation on inherited property

[Dylan Grieve]

First off, let me say thanks to everyone on here who has interacted/answered questions so far; I think I've vastly underused this resource. 

Anyway, I went to look at an inherited property that could have made a great deal. ARV is about 110k, and it needs a complete gut rehab.

Here's the issue: The home belonged to the wife's mother, and the wife inherited it. Before her mother passed away, the wife's sister got her mother to take out a HELOC for the sister. The sister spent it all and never paid it.

It gets juicier. 

The sister dies, and now I guess there's a lien on the house b/c of the unpaid HELOC, which is around 50k.

I had offered her 20k, but there's the HELOC issue...

So, (and I apologize if this seems like a stupid question) can a short-sale be done in this situation? 

Thanks,

Dylan