How to proceed? Bad House...Owner behind

[Wes Brumit]

Received my first call from yellow letter sent to homeowner of vacant property. House is in disarray and owner tells me she owes 40k and is one year behind in mortgage pmts. Approximately $930/month. Whatever the fees and penalties are I figure she's behind at least $13,000. The ARV of this house is $115,000, repairs easily will run about $40000.. The mortgage company she says has not started foreclosure yet. Find that hard to believe. She says whatever I offer would need to be approved by them. This screams short sale or pre foreclosure. What's BP's advice?