And the Federal Housing Authority is totally ok with banks doing this.  

They said that if I need any more information then I will need to get an authorization form signed by the borrower and email it to them.

Obedience: The agent is required to act, following and abiding all lawful instructions, subject to the principal's continuous control, but not exceeding the scope of the authority conferred by the principal.

You do have to get them to sign an ACH authorization form.

I only need to know who is the party entitled to enforce a note when it is endorsed to you and in your possession, even if it is for collateral.... the legal authority I have found solidly supports the party holding the note, period...so I guess that my question will remain unanswered...

What words should I use when trying to get authorization from the seller to negotiate on their behalf? 

When you say it is going to the county in one year, I assume that you know enough about Minnesota law to feel confident that the county will be receiving clear title, which you can then purchase.But here is what I suspect will happen.The taxing authority (county?)

*Mod's - if this type of post is not authorized for this specific forum, please remove as necessary*Hi BP,I have been doing what I can in my limited free time to educate myself on making the jump to commercial/multi-family investing. 

If you do a loan modification, you would be doing it based on the 80k not the 40k. if you go to foreclosure, you would be getting the 80k (amount owing to you) + fees, etc...If you do a deed in lieu, you would get the title and decide to rent it, sell it as is, fix and flip it, etc...if you authorize a short sale for 81k, then you would be getting the 80k and borrower will get 1k (Assuming total payoff is 80k). 

If your plan is to go section 8 it might not be a bad idea to go to your local housing authority in the community where the building is located just to introduce yourself.