The mortgage holder has agreed to short sale or even work out payments to stay in the home, however the homeowner still wants to move on.Any thoughts?

He doesn't take Visa.

LolIt's a "place holder" until they find out the actual amount. 

My name is Joe Budelis and I'm a long time holder of residential rental properties.

Why don't you ask the 1st lien holder if the note is current?

If you want to buy from banks, expect to be required to buy pools of notes.If you're trying to buying a soecific note on a particular property, about the only opportunity that I've seen is from private party note holders.  

The questions I have first is:1 - what is your "exit strategy".2 - what cash are you bringing in to use3 - what is the cost of your money (loan/debt) over the time you will be rehabbing  4 - with the auction so close, is the seller's lien holder willing to settle before auction.  

You will have the title company create the note, they will be the note holder, and you can set the interest rate to whatever they agree to.  12% 10% 3%, whatever it takes to do the deal.As for how to get more money, I would look at some hard money lenders. 

The tenant application provided by Bigger Pockets has a section for the tenant to list their bank and account # as well as their Visa/Mastercard and #.

Place yourself in the position of the lenders or note holder(s).