My folks focusing on forclosure

Any ideas here?

My folks are in Fort Myers, FL. with an outstanding loan of 128,000 on thier 2-bedroom home. Similar properties on thier same street have sold for 75,000!! My father in law (he’s in his mid eighties!) is unable to find work and can no longer keep up with the 1,000.00 monthly payment. I suggested a loan modification but he says that has gone nowhere. He says he’s about to pursue bankruptcy and forclosure.

He’s asked me to take over the mortgage, pay me 600.00 monthly as rent(which he says he can handle). But that leaves me with 400.00 a month that I just don’t think I could cover.

With these three variables being the lender, my father-in-law, and me - there must be some creative ways that might allow this to work. I’m certainly not experienced enough to see them!

I welcome any ideas!


Ugh, those numbers are ugly and, unfortunately, not uncommon these days.
Is your father-in-law insistent on staying in the home? If so, I think the only option is to contact the lender yourself and pursue that loan mod. Good luck.

As the number mounted to such a large sum, it is no way to ask for refinancing or something else. But DON’T ever pursue brankrupcy or foreclosure before everything that might be happen, the bank or lender will visit automatically when bankruptcy is inevitable. Short selling may be a good way but still have to carry monthly payments ( which is lower than before many times ).

I would def try and do a short sale before going to foreclosure or bankruptcy. Those are the worst things you can possibly do. To be qualified for a short sale, one must have hardship which can consist of anything from loss of income, medical bills, death etc… Does your father in law have hardship? If so, I would look into this before making any other decision.

veronica, if gramps can’t afford 1000/mth then he has a hardship but the short sale was my first idea to. I know nothing of this and the numbers may not allow it but maybe he should talk to a mortgage person who specializes in reverse mortgages. I’m sure he will need a lot of equity. Herbster

I’m not saying that the lender will go for this, but its worth trying. Your Father in law is in his eighties and can qualify for a reverse mortgage. You can off the lender either a short refinance via the reverse mortgage, or if they dont want to take that much of a hit versus what they are owed, they can even agree to subordinate the outstanding amount to the new reverse mortgage.

They can collect larger payments on the 2nd that they will hold as there are no 1st mortgage payments on the loan. This loan allows your father in law to live there mortgage free until he either passes, or he moves out for 12 months or more.

I would approach the lender with this as an option, It might work?

Good Luck


If someone is in real estate business then foreclosure provides a better opportunity to expand the business.


He’s not getting a reverse mortgage if the property is under water.

I’d try a loan modification first, then if that is denied, a short sale.

Worse comes to worst, at his age, I don’t think he should be worried about his credit score. If he loses this house he’ll spend the rest of his life renting, so just what does he need a high credit score for, anyway?

If he decides to walk away, he should first contact the bank and see if they will do a keys in lieu of foreclosure for him. He hands back the keys and signs off on the title and the bank saves the costs of foreclosing.

If the bank forecloses, suggest to him that they keep the house in pristine condition and take photos. That will help them to rent, since many landlords are reluctant to take tenants who are in foreclosure. If he can show he didn’t just walk away because he didn’t want to pay, but rather lost his job and couldn’t pay, and show proof that his house was well cared for, it will go a long way towards convincing a landlord to take a risk and rent to him.

If he is going to rent, he needs to avoid bankruptcy. Bankruptcy will make it really difficult to rent a decent place.

Forgive me for not explaining the reverse mortgage in combination with a short refinance better. Sometimes I forget to take the time to give more details…so here goes.

1st to address tatertots concerns. Yes a lender who holds a mortgage that is under water will potentially accept a short refinance. A short refinance is not a lot different than a short sale, the lender agrees to take less than what is owed on the loan.

In this case the offer will be maxed based on the 3 criteria that makes up a reverse mortgage loan amount maximum. 1st you need to determine what the FHA max. loan limits are in the specific county. Then the loan is determined by the borrowers age, the older they are the higher the loan amount, and the interest rates, the lower they are the higher the loan amount and last what the property appraises for? Based on those 3 factors the max. loan amount is pin pointed.

I say nail all that down, except the appraisal, but get the best estimate as to what it will appraise for, then with the max. loan amount deducting closing costs will then determine the max. that can go to the lender. The lender may take this as payment in full, or if they dont, you can offer to have them rewrite the remaining balance as a 2nd mortgage with monthly payments to them. They can even have higher payments than normal as there is no mo. paymenyt on the 1st mortgage.
Will a short refinance be acceptable, well its no different than a short sale in a lot of ways, so yes if you approach the lender correctly, they would consider it just as they would a short refinance. FHA just came out with a new short refinance program…Whats that tell you?

Here’s a thought however I do not know the feasibility of it. How about a Section 8 renter or any renter for the second bedroom with house privileges to help with the monthly mortgage. It will buy time to figure something else out.