In Las Vegas at that time there was a law on the books that specifically forbade the person on the note, or anyone related to that person, to buy the note in a short sale or at auction. It was written to prevent scams where people could pump up their house value and get refinanced, default, and then buy the house back at a discount and pocket the difference.

It was amended in 2016 I believe to allow some purchases if they met specific criteria.

The "usual" way to getting around these things has been to create a company and have the company buy it. Companies are nominally 'new' people and don't have family or relatives.