If the house might sell for $155K then you might be motivated to buy it. You could give him $1,000 and bring the note current with $9,000 while picking up the house sub2. If I understood your numbers you would then own the house with a note of $118K on it. At $155K you cannot quite re-fi your $10,000 back out with an 80% loan, but when it hits $160K you can (other than loan costs).
If the house might sell for $155K then you might be motivated to buy it. You could give him $1,000 and bring the note current with $9,000 while picking up the house sub2. If I understood your numbers you would then own the house with a note of $118K on it. At $155K you cannot quite re-fi your $10,000 back out with an 80% loan, but when it hits $160K you can (other than loan costs).