Advice on how to leverage a zombie house

[Christopher Meis]

Scenario: My neighbors moved to another state and abandoned their home, they stopped paying the mortgage about 6 mo ago so that they could move on. The house is underwater with two mortgages to the tune of about $160k, which is about $20k above the current market value and about $5k behind. The property is distressed, but is mostly cosmetic, dirt and some deferred maintenance, $10k to $20k  would make it highly salable if I could acquire the property at a discount or even at all. I am still in contact with my neighbor who is willing to work with me, and I have the keys to the house with permissible access. The primary mortgage is $140k, held by Seterus and is not assumable, I'm not sure if they would short sale for enough of a discount to be able to do anything. I though about trying to get the note, but have yet to call seterus, I have heard they are difficult to work with and was hoping to find someone with a resource there. Ditech holds the 2nd lein and may be willing to deal if I owned the 1st and told them I was foreclosing. My neighbors would deed in lieu if I held the note. The market is Norwood Young America, MN, rental is not strong, but contract for deed would work very well. Any thoughts on how to approach this deal, or resources that I could leverage to get there?