Short Sale/ Wholesale question

[Sean Davis]

Okay here's the deal. I got a lead from some flyers I put out. There's a lady with vacant home and her husband just died about 6 months ago. She can't handle paying for the vacant home and her new place. She informed me that it's going to sherrif's auction in about two weeks. The Mortgage company told her that they would accept a short sale as long as there has been a sign outside of the property for atleast 90 days and it wouldn't sell (I'm not sure what that's all about). Here are the numbers...

ARV around $95,000

Loan Balance $95,000

As-Is about $85-$90,000 (they got taken by a pretty dirty investor... needed repairs were ignored/hidden only to surface later)

I'm assuming the way to go would be a short sale since the mortgage company said they would do it. Do I just need to contact the mortgage company and make an offer? Why would they want to short sale it over auctioning it off? Will they need proof of funds or will they allow me to assign it to an end-buyer?

I want to help the lady out but if there's nothing I can do then there's nothing I can do. Let me know if guys can help. Thanks!