Can I short sale to myself or to my friend?

[Dani Beit-Or]

there is a common notion out there that I cannot shortsale my property to myself, maybe using a friend or a family member - why is that?

My guess is no that it is illegal but that the banks do not want it. Any ideas why?
Are there ways to overcome this w/o breaching any contracts?
Any one has actual experience actually overcoming this challenge?

[Audley Humes]

Dan, think about it. If you loaned $100,000 to a homeowner, and they defaulted on their loan and then that same homeowner came back to you and said I want to Short Sale my home and get a new mortgage on it. Don't worry about the loss your're going to take though, just let me pay you back $60,000 and the other $40,000 I owe you let's just forget about that.

Or just let one of my family members buy it for $60,000 so they can let me lease it or buy it back from them. I'm not trying to be funny, but it just would not make any sense for a bank to allow that.

Honestly, I don't think there is any legal way possible to accomplish what you are suggesting. Especially since Approval Letters usually states the Homeowner cannot receive any funds and it's must be a ARM's length transaction.