They're assuming the price will continue to increase, and they'll be able to sell it for even more in a few years.

The whole mess was based on speculation of ever-increasing house prices.

IN other words, you are trying to increase the equity via the short sale, so that you can pay yourself, some to the seller, pay off the remaining loan balance and still have a 70% of as is value to assign to the end investor buyer?

She gave us the NROC (non-refundable option consideration) which covered the cost of pulling the property out of foreclosure.  

Then increase your focus on those activities.

It could affect your consideration and amount you're willing to pay.2) Make it your mission to know who realtors think is a great home inspector and book him immediately.

You may have to hand onto them longer, but take that into consideration when you are acquiring the property.

You can even have built in rent increases if that is what it takes.

The housing bubble was created to mask the recession, but you cannot escape or increase the problem.

Your credit score will likely increase when the credit bureaus see that you are paying more than requested each month.