Some key details are missing. Are they in Chapter 7? Is the Trustee selling the house? The short answer is that just about anyone with the money can buy the house in an arms length transaction, and it likely requires Court approval. Try mortgage brokers to get a loan, and speak with the Trustee. If it is not a Ch. 7 and a Trustee, you need to provide more details.
If the bankruptcy trustee is in the process of selling their house, you will need to deal with him/her, NOT the mortgage bank. BTW, how can a house be "free and clear" AND have a mortgage bank involved? Good luck.
Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.
Yes. You need to pay a price that the Trustee finds acceptable and that the court approves. If you get a reasonable offer in before the Trustee lists it for sale, some of the avoided commission costs could reduce the overall price. If you plan on financing with a mortgage, some lenders are skittish about loaning funds when the bankruptcy court is in control. You may have to shop around for a willing lender.
You are not being clear as to whether or not your parents are still in Bankruptcy. Is the trustee making a motion to sell property under 363? if so, you would eligible to purchase the home. If by "free and clear" you mean, your parents have already filed for BK, no reaff was filed on the mortgage, and their case was closed, and you are attempting to complete a short sale, then you probably cannot. Most lenders do not want this tactic used simply for the seller to shave off a hefty portion of the loan, simply by using a front man, such as a family member to purchase the home. Short sales are subject to the "arms length" rule.