Short Sale Question

My sister and I have recently taken over my mother's affairs as she suffered a massive stroke recently. One of those affairs is her former home which she still had but was underwater in the mortgage. Her maturity date was last year for $30,000. She actually had had the home since 1999 and she has paid every month on time until her health started to decline.She I got a call last month from my mom's mortgage company stating that they were actually wanting to settle my mom's debt for $10000. They explained it as "getting the home off their books" and my mother would own the home free and clear. I explained to them the situation with my mother's health and that it would ultimately be me and my sister's decision as we are now her POAs. I talk to my sis and we both decided that we wanted to just pay the $10000 to the mortgage company to just put it all behind us and mom. Plus, if we get to keep her home, even better. We finally get the paperwork from them and it reads as a shortsale agreement. My sister is now skeptical and honestly I am too after talking with someone at the bank who told me that it sounded a lot to her like mortgage fraud. I just want to clear my mom's mortgage debt and if possible, save her home. My sister's fear is that we end up giving them this money and the mortgage company sells the home right out from under us. It has me worried too. I just want to make sure everything is done legally here. Please help.