Refinance Impossible? Extenuating Circumstances

[tfkallday]

Hi everyone, first I wanted to thank you for all that you have do.  Because of this community I have essentially restored my credit (Up about 120 pts).  With that said, I am attempting to help my mother fix her mortgage. 

Below is a summary of our circumstances, and I appreciate any helpful comments or advice.

-My mom and dad bought our house in 1979; in 2004 they bought the house next door for cash and connected the two homes.

-The lots were merged and the mortgage left is $124,000 while the home is tax assessed at $320,000

-My dad (sole breadwinner) died in 2008, which left my mom as the sole owner of the mortgage.

-The mortgage is of the worst variety, a variable rate mortgage through Wells at 9.875 % interest.

With that said, the mortgage costs mom roughly $2000 a month which she cannot really afford. 

-Looking at loan calculators, her mortgage at market rate should be closer to $900

-She missed payments in the past, which pushed the home into foreclosure-- we got it out, but she is still struggling

-Her credit is destroyed because of missed payments and because she pays all of her money to her home and not other debts

-Refinancing conventionally is not possible because of her credit

Steps that we have taken to try to restructure loan

-We have tried going through Wells Fargo in a myriad of different ways via hardship, extenuating circumstances, etc.

-We have been declined by Wells Fargo about ten times while the loan officers say we do indeed meet the threshold

-We have went through the HOPE program and all the other programs available for which we have been declined a number of times

What to do now?

-We are essentially out of options.  My mom wants to keep the house she raised us in and we are stuck with this giant payment due to interest

-I am young and due to my student loans I cannot purchase the home from her, also I live out of state and not in the home

-We have looked into reverse mortgages (desperate option), but the closing costs total about $20,000 which is predatory and ridiculous

The only thing I can come up with is to find someone to refinance this loan down to the market rate, or even like 5 pct.

My mom is 63 and collects my dad's SSI at $1600/month and she works part time.  We are looking for our savior to renegtiate the loan to terms she can afford.

She has a risky credit profile but there is a ton of equity in the home.

Are there any options out there for us?  We may have to sell it, which will ruin her life.  This is the absolute last option.

There has to be someone out there who will help good people who want to pay.

Any help is appreciated.  Love you guys

[Anonymous]

Have you tried some kinda refi outside of Wells Fargo?

The payments current?  

What kind of physical shape is the property in?

Have you thought about renting a room to someone, or renting out the add on house?  

Its not really complicated.  She's living on a 1600 dollar SSI check, and a part time job (min wage?) and the payment is 2000 a month.  That is not sustainable, as y'all are finding out.   More going out than coming in=revenue has to increase from somewhere.  You are young, have you thought about returning home, taking a job, and help?  I know putting your life on hold, not something you prolly want to do, but I don't see what else works.  If you want her to stay in that house, then more revenue has to come from somewhere, she is 63 and tapped out.

Some of the programs you looked at would help in the short term, but long term it would drift back to the status quo because more money needs to come in.  Outside of that, selling the proptery looks to be the only alternative.  In that scenario, don't think you're gonna walk away with money in the bank.  The property is so heavily financed, by the time everything is paid, and fees rung up, not gonna be anything left.

I know it looks bad, but having a plan to move forward will inspire confidence.  Keep us posted and good luck.

[tfkallday]

I thank you for the reply.  What I don't understand is the amount of programs by big O which are supposed to help people who have been hit by hard times economically IE hardship.  Refinancing the loan would certainly help in the long term as it would reduce the interest and payment dramatically.  I also don't understand why you say the home is so heavily financed when there is more equity in the home than the amount on the mortgage.  Sorry if this comes across wrong , I do not mean it to.  But there are plenty of others "under water" who get help.  All we want to do is re-fi to a market rate

[DallasLoanGuy]

fha relaxed their guidelines on foreclosure seasoning if you could prove a loss of income for 6+ months.

other than that, i am not aware of any ohbama loans

[tfkallday]

Thanks for the response, how long does the loss of income back date?

[ms_cora]

Sent you a pm