Stuck In A Bank Loop
I recently came across a property that I found to be very interesting and challenging,so I need some advice. The current owner is a widow and is trying to find a way to get out of the mortgage without bankruptcy. Her husband was the money earner for the household. She tried a lease purchase to offset the payment but the person defaulted after one year. She applied with her mortgage company for financial hardship and they said OK. This still does not release her from the loan but just momentarly defers it. I had the opportunity to review her contract and found out that they did not and could not get the mortgage insurance because of his health condition at the time. This loan was taken out about five years ago. Her husband just recently passed last summer. This puts her in the position of not being able to make any payments, seeing that she also is disabled. She may also have to pay a penalty for early pay off. I was wondering if it was possible to help her sell the note. but that may leave a balance at the bank due to the note will only be sold at a discount. This is the type of thing that really bugs me because of two things, the first is that the public is not fully educated on proper mortgage handling, and the sometimes advantage that is taken out on the elderly stating that they can get a lower rate by doing a REFI. A few years back I came across one where the person was told that with their loan they had a $26K line of credit attached to it to use whenever they wanted ,come to find out after carefully looking over the fine details that was for the balloon payment due in ten years. Not only that why would a elderly person be given a 40 year mortgage at the age of 63, chances are is that the loan will out live them and the bank gets paid twice on the same property . If any thing can be done to help this distressed seller and I do feel as though it can please advise. I am not in the financial position to just assume the mortgage and continue as where it is. What legal rigths does she have and what would be her best choice to avoid bankruptcy
[ Edited by CarlSr on Date 10/24/2006 ]
Yes she is disabled and no she can not get any social security for herself because of age ( under 60) also because her husband worked for Conrail she can not collect any thing of his until she is 62 ( according to the Conrail union office ) Her disability does not stop her from working but it does limit what she can do for a job. She currently has a lawyer working on the Conrail issue. Also the same lawyer is working on the issue of the person who defaulted after one year on the LPO. Apparently they broke the lease agreement and damaged a few areas in the house (in which are repaired now out of her pocket) I am not to familiar with the reverse mortgage process so that I can explain it in detail to her. What is your thought at this point. Send P/M at this time
[addsig]