Relative In Foreclosure, Am I Able To Help Them Keep Their House?
My mother and father in law are facing foreclosure. They expect to receive the notice in the next week. What can be done to keep them in their house? Sometime back my mother in law lost her job as the top wage earner and consequently fell behind in the payments. Now she has a good job again but still too late. They already filed for bankruptcy about a month ago. Any ideas?
Sounds like you should attempt a short sale.
Short Sale Pro?
JohnCl
Give more details about the bankruptcy (BK). Which chapter was filed, and what was the outcome? If they're facing notice it sounds like their BK claim was dismissed...true? Unfortunately, too many people jump to BK as a first response instead of a last resort. It can really limit your options...she probably can't refinance at this point, and if she can she'll pay very high interest because of the BK.
Is your mom's loan FHA insured? If so, there may be a number of options open to her. Start here: http://www.hud.gov/foreclosure/index.cfm
But how secure is their income now? If it could vanish in a moment and they're living at their present means, they should really consider selling and finding more affordable housing.
Right. Bankruptcy changes everything. Sorry I missed that.
JohnCl
Isn't Texas a deed of trust state? If that's true doesn't that mean that you don't have a lot time to work this out? Short sales are time consuming and difficult to work out a lot of the time. It's an approach but if the clock is ticking I'd wouldn't lay all of my eggs in one basket.
Is there equity in this place? It doesn't sound like they are too far behind, can't they get caught up or couldn't you help them?
get an authorization to release information from your inlaws; talk to the mortgage company, find out exactly where they stand.
Then you get to give them money to catch-up; you DO NOT take title to the property (unless you want to get a divorce in a few years).
As your parently probably told you, your shouldn't loan money to friends, and NEVER to family. If you are in a position to give them what they need to catch-up, then do that, otherwise, try to help them sell the house and let them live with you until they get back on their feet (find them the money).
Thanks for the replies. The full story is that they fell behind in payments. Filed for bankruptcy. Made up all back payments. Then continued paying again. Then after some miscommunication between the couple as to who mailed the check, they made last month's payment late. This month's check was returned to them saying the account was "pending legal action". This is where they stand. I dont know if the bankruptcy attorney is aware of it yet but my in-laws are supposed to call him monday morning and seek advice. I've already had them sign a release of information authorization form so I will call the lender on Monday. I'm just not sure what to say to them.
Do they have retirement accounts they can borrow against? If so, tell them to get info re: hardship loan or withdrawal.
Is there additional space they can rent for income (basement, garage)?
If they can afford the house based on their income today, help them to stay in the house. If the income does not support the current mortgage payment, help them to sell and buy/rent something smaller. I would try VERY hard to time the sell side of the transaction just right so that they can move right into their new place.
I have a good friend who is so deep in denial it saddens me. Long story short, if she had a personal disability policy outside of the job's benefits she wouldn't be losing the house. She has no income or savings & seems to think she can keep the house if.....
The bottom line is affordability. Work through the #'s with them & help them to make the decision based on the math. Get a realtor on the case to help them buy/rent something if they can no longer afford the home.