Newbie confused on shorts - procedures

[Brad James]

i just read up on this today by a guy with one one those "get rich over night" packages that every investor in the country offers now. Anyway, he was saying how you can talk the lender down before it is in foreclosure??? Did I miss something? Is this the same as a pre-forclosure? From what i understand, the home owner must work with the investor to get this done? Any any 2nd/3rd lenders will take pennies on the dollar to setting since they will get nothing otherwise?

Reason I ask is I know first hand that a house is under foreclosure proceedings. House is still in owners name but owner has moved out. House is appraised at 94K, 1st is 74k, second is 22K. House is worth 105K. No luck talking to the big lender. They say just to wait til it is on the market and goes through legal. How the heck do I find the owner now?

So how does this "short" system work? Does the owner take a foreclosure hit and the lender still settles for less? what am I missing here?