renegotiate mortgage

[Anonymous]

My husband passed away in Dec. 2008, and his life insurance was not enough to pay off the mortgage.  My lawyer suggested contacting HFC who financed the mortgage to renegotiate the terms.  The HFC offices closed, and the only thing they offer now are programs that will ruin my credit which I desperately need to keep in good standing. The house value is underwater due to market conditions which prevents me from refinancing with another bank.  HFC refuses to renegotiate because they closed the branch offices.  I can't get help through HARP because Fannie Mae and Freddie Mac do not own the mortgage. Does anyone have suggestions for what to do, or I am just stuck with this situation?  Thanks for your help!

[MarineVietVet]

I'll let the mortgage experts advise you but I'm so sorry you are going through this. I hope you find a way to resolve this mess.

[Anonymous]

Thanks! Also this isn't a FHA mortgage either.  Is there anyway I can get a streamline mortgage without an appraisal?  Thanks!

[Anonymous]

I believe streamline is an FHA program so a non FHA program would not be eligible.  If it is not a Fannie or Freddie loan or and FHA, you may have very limited options.  What loan program was it.

One thing that may mess you up is that if you got a large settlement from the life insurance they may want to know what happened to that money.  They are unlikely to drop the principle in any case, but they may do some sort of rate reduction to help you out.  But, if you got a settlement in 09 and it did not go directly to bills (or there is some left in savings/investments), they are going to be alot less likely to do anything. 

Good luck with it.

[Anonymous]

Thanks!  I don't know if it was a specific program.  We refinanced our mortgage and consolidated some debt.  Our credit scores had taken a beating during this time, so the mortgage was financed at 10.2%.

The life insurance wasn't large.  It paid for his funeral, a few major house repairs that I had to take care of not long after he died, and then I paid a few bills.  My husband had emphysema and heart problems, which means we were lucky to get any life insurance on him. I tried to increase the coverage at work and it was denied.  He was basically uninsurable.  I miss him so much.

HFC is not willing to do anything unless it involves a program that ruins my credit.  I read somewhere that HFC's parent company, HSBC, received taxpayer bailout through AIG.  Is that true?  Thanks!

[Anonymous]

Scarlu I don't have an answer to your question but I just wanted to give my condolences. I went through a similar situation of losing a significant other recently. It's a very trying time and I know how you feel. I hope everything works out for you. I'm sending good vibes your way!!!

[Anonymous]

Thank you - it has been hard living without my husband. He was everything to me.