[IrishCatholic]

There is no restriction on your parents buying the house. The auction is an auction.
Have them buy it and then pay them rent-to-own. You and your family will be safe and you will have the dignity of paying back your family and the self respect in doing so.

Unlike some on this forum I understand that the real world is a hard place. I'm sorry you got in trouble and I hope it works out for you. Always know there are better days ahead.

[hsmomx3]

I believe they wanted to buy it before it got to auction. I would pay rent to them, though.

I am not even sure if that is possible—short sale prior to auction.

[JIM O]

The bank will want to be assured the short sale is an arms lenth transaction. If the bank is motivated to accept a loss as full payment of your obligation they are restricted to being assured they are getting market and the transaction passes the stink test.

Clearly with your receiving a benefit of reduced rent (and living there after the sale) and your parents potentially receiving a financial benefit. I doubt it passes the requirements imposed by the FDIC.

Also don't forget you will likely receive a 1099 for the debt forgiveness.

[Kartographer]

hsmomx3
I think IrishCatholic has a good idea. I wouldn’t fool with the bank any more than I had too. Most likely the people you are dealing with are the Servicers not the people who hold the note. The Servicers have been repeatedly shown that their are milking the foreclosures for all the money they can in fees and are working both sides to increase their gain.