Is it possible to turn a foreclosure into a short sale?

[Josiah Stacy]

I've been direct mail marketing to homeowners facing foreclosure, namely, those with the auction date already scheduled. I mail to anyone in my desired areas who is 30+ days out from auction, and follow up weekly until the week before auction. I've had a high call back percentage, with about 2-4 of 20 on an average list calling. The problem I keep running into is that there is just too much owed on the properties. There is not enough equity in any of these to make a deal happen (at least not the ones I've heard from).

My question is this: If a homeowner wants to sell to me versus letting their home go to auction, what are the chances that a bank will approve a short sale? So far, I haven't even suggested the idea to anyone, because I just don't know if it can work. I know the chances are slim, as by the time the sale is scheduled the bank has likely already paid the lawyer and does not stand to gain by allowing a short sale as opposed to letting the property go at auction, but I can't help but feel there's opportunity here.

Any ideas?

On a related note, has anyone had any success marketing to foreclosure leads (auction already scheduled)?