What would a lender do if you purchase the house FHA exactly as you say and your relatives decide not to loan you the money.

How many personal days did you or your relatives use the property?

I suggest that your relative buys (or borrows from the library) a recent book on real estate investing.

As the new owner on the property (if you do purchase the property at auction), you have the ability to bring the 1st current, acquire the first at a discount, work a short sale on the first, and/or bring all your relatives to the property, hold hands so that the property is surounded by all of you and then do a "home-buying chant" to dispel the eveil lender spirits.Actually, doing a short would be a new idea to me as you are now technically the owner on record and it may be an uphill battle with teh asset manager/loss mitigator as their premise is that they won't allow a short sale on your own property.

By both of you being newbies, I really think that your relative should have found an experienced broker to help get the deal done correctly and split the commission.

If they want one your relatives should be able to get a explanation for the denial.

The only problem you may have here is that you said its your relative.

I hope all went well and your relative now owns the property!

So your relative did a "subject to" deal and sold the property to someone who assumed his or her loan.

Sometimes tehy'll go ahead and want to list the property first, sometimes they are open to selling before a listing.It all depends on the bank, investor and ultimately your relations with the lender and your ability to convey the psoitives of selling beforehand.Also, there are situations where the drawn out connundrum of "which hand is doing what" keeps it off the market for more than a few months.