Structuring a Cash for Keys to help a distressed homeowner

[Shannon K.]

I'm trying to structure a deal to assist a distressed owner I know. Here's the details, please advise if either option could work. 

Market Value of the property is about $230,000-235,000 

Taxes and insurance are escrowed into the loan.

It's in excellent turn key condition, built in 2006 and is occupied by the original owner. 

Her loan is in default and the auction has been scheduled for October 10th. Payoff is 202,000 so this is not a short sale scenario but she has listed it high for the last few month to try to obtain an offer close to what she paid as well as include full commissions for agents. Which has not produced an offer due to the price. There is a CFD bond or special assessment with the city for roughly $2500 due upon sale. It is current but quarterly payment will be due again in December. CFD claims they are actually in the first lien position. Prelim supports this. There is an HOA additionally that is due quarterly but account is current also.

Lender has offered 3K cash for keys, but I think an investor or myself could do better. 

Would it be better to have an investor pay the CFD bond and record in the first position against the bank? Or offer the seller a little more maybe $5000 and assume her position in ownership? Or have the seller go ahead and collect the cash for keys 3k from bank and give that to the investor to pay off the CFD to be in 1st position for 0 buy in with guarantee he will split the proceeds of quick sale with seller. Then he can sell at closer to market value quicker while vacant and would not be paying commissions on at least 1 side, he's licensed. Bank would need to buy him out of his 1st lien position correct? Except he'd sell the actual property first, then plan to payoff that loan balance, and in return credit seller a portion of the proceeds/difference after sale. But this way she is not on a deadline due to the auction date scheduled and her mortgage balance is not increasing per month once she walks away correct? Auction would be marginally delayed due to new recordings taking place correct? As well seller may end up with a higher net by restructuring this way because that is the intent of all involved.

This would occur between amicable parties. 1 of which is licensed and had overpriced listing, but wants to stay at arms length and create a less stress scenario for the seller, is simple looking to get creative.

Any advice or red flag we should be aware of is appreciated. Or feel free to identify this is a foolish thought we should abort.