Short sale Questions....

[Dustin Lyle]

Im assuming this question has been beat into the ground but I cant seem to find it yet so here goes...

(THE STORY)
The HO Purchased a home 10 years ago for 88K, 2 Years ago (after watching Flip this House) it was semi-gutted in prep for a rehab BEFORE getting an appraisal to refi to fund the rehab. tisk. tisk. The HO was unable to fund the rehab thus leaving the house unlivable. Loan balance is 70K. House has been on the market for 6 months at least, first At 86.9k, now at 78.9k. Word from my appraiser on drive-by and comps as well as the agents Competitive Market Analysis puts this house between 138k and 150k IF REHABBED. A walk-through with my contractors puts this house in supreme condition with 40K.

(THE QUESTIONS)
1. If I can substantiate reasoning to his bank that selling short on the house will still be profitable to them, and only help them, is there a way for them to "write off" the loss... without the current HO still being liable for the difference?

2. Is it at all possible to purchase a mortgage, that's in GOOD standing, from a bank for a discount on principle? IE offering the bank 55K for the 70K note, settling at or around 60K, then as the note holder, me personally giving him the opportunity to walk away free and clear?