Short sale means selling for less than the mortgage, meaning for a loss. Seller comes up with the extra to pay off lender, or gets lender to agree to sale. If it is a first mortgage, it should be without recourse, and if he sells it, then he's done. Some dings in credit, but not like a foreclosure.
If there's more than one mortgage, need agreement of both lenders, which is harder to get. And the second mortgage remains a personal liability, they can chase him, they can 1099C him, meaning tax consequences.

[...] money news blog – Just another WordPress weblog wrote an interesting post today onHere’s a quick excerpt      The slump in Marin County home sales has resulted in an increase of homeowners requesting the County Tax Assessor to reduce their property taxes.  Joan Thayer, the County Assessor-Recorder, reported that her office has already received 150 requests this year up from 90 requests in 2006.  Thayer says, “the increase in request is a reflection of a sharp drop in local real estate sales and a leveling of Marin home prices. And, the County is required to reduce the tax value of property when i [...]

The private lender is not an issue. You should proceed to look for financing. Once found, you will actually need to take title to the property.

Sounds like you may have some challenges securing a loan, due to the fact that you have a bad payment history. However, if you have stable income, decent debt to income ratios and an otherwise clean credit report, you should be able to accomplish your goal.

Be persistent…
Regards,
Joe Ballarino
http://www.amerivestrealtyofnaples.com

this usually means the property sold as a foreclosure sale