VA Foreclosure

Is this a good Short Sale case?

2000 SFH, 3B, 2.5ba, 2C, unFn Bmt.
From my research:
Seller purchased for $139K with VA Loan=$142K in 09/00.
Refinanced in 06/01 for $150K (Steep rise for a year).
"Judgements & Lis Pendens" on Title (no details).
Present Value = about $175K

Loan Bal = $161K

Seller is behind on payments BY $14000 and is in Foreclosure. VA added the payments to mortgage ($146K balance + $14K = $161K). They told him that he could sell the house himself and pay the balance or give the house back.

What does it take to stop the foreclosure? How should I deal with VA?
What's a good offer - 80% FMV?

Thanks

grin

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