Choices - Struggle to Keep, Short Sale, Foreclosure

**spdblondie** · 08-05-2009, 11:34 AM

My sister and her husband are in quite a tight spot and no one seems to give them straight answers. They are $4500 past due on house payments, and the house is in bad condition. They have spoken to their lender and have been told different things. They are chasing their tails basically and of course the fees are adding higher and higher.

What is the best thing in your opinion for them to do? They are both in their upper 50's. She cannot work due to health issues and he is self employeed and his business has dropped considerably due to the economy. Their home has some termite damage, and has not been updated since they moved in it 23 years ago. Inside and out, it needs a LOT of TLC.

They cannot afford all their monthly bills, let alone try to catch back up the $4500 past due. However, if they struggle to keep the house, which is hopeless, they certainly do not have the funds to try to fix it up.

I am sure there are a million more stories JUST like this, but seriously folks, what is the best thing to do?

Struggle to keep it, voluntarily turn in the keys (perhaps via short sale or other means I do not know about) or just wait until the bank takes it via foreclosure.

Thanks for any info!

Sandy

PS - I am seriously writing this for my sister and her husband, I am happily buying my own home but after reading this site see how others can provide so much useful information.

**tucsonhomes** · 08-05-2009, 04:11 PM

If the loan is a Fannie Mae loan, there is a mitigation process that the lender has access to. There are qualifications for the process and it takes some time, but it works.

Check the Fannie Mae web site fanniemae.com

**spdblondie** · 08-05-2009, 05:02 PM

It is not a Fannie Mae loan.....

Thank you though.

Other thoughts/suggestions?

Thank you.

Sandy

**tucsonhomes** · 08-06-2009, 11:16 AM

Even if its not a fannie mae loan, and most of them are, lenders are very adept at negotiating mitigations in many cases.

Have they contacted the lender and if so, they should ask for the loan modification contact.

**tucsonhomes** · 08-06-2009, 11:17 AM

Incidently, loan modifications, in any case, while they may be greatly beneficial in the moment, always have credit rating consequences and they are always negative. Not nearly as negative as a foreclosure, but negative none the less.

**Greg** · 08-07-2009, 06:23 AM

Their credit is already shot so now they need to mitigate their loss. They can try a short sale with an agent experienced in short sales or they can turn their deed over to the lender (deed in lieu of foreclosure).