Question about a short sale

eh, the bank can do that if they so choose....it just doesn't seem like a smart move unless the bank feels that they can unload it at foreclosure for what's actually owed on it as opposed to taking less than what's owed if they short it.

I seriously doubt that the Realtor has any control over the situation. The bank is going to make all the calls. To be sure, just tell the Realtor to get you proof that the home has been set for foreclosure.

I suspect the there was either a Mortgage Insurance company, a second lien holder or both that mucked up the deal. A short sale might have been in the lender/servicers best interest, but not necessarily everyone else's.

The more parties Invovled, the less likely it is that the short sale will close successfully.

ETA: There's nothing stopping your kid from buying the property after it becomes an REO (after foreclosure).