Seeking a solution for a borrower

[Collin Kautz]

Hey BP community,

I am looking for a solution to my friend's mortgage problem.

The story: She is 77 years old, has paid her mortgage payment diligently and on time for the last 25 years. She has 16 years left on her loan and she missed one payment back in Nov 2013. The reason she missed the payment was due to a medical bill she needed to pay. Medical bill is paid but mortgage payment has grown worse.

Now, her lender is making her life hell. She was told she couldn't get a loan modification after being on a forbearance plan for the last 5 months. She is now delinquent 4 months payments which she will not be able to bring current now that she is at the end of the forbearance plan. The options are that she bring the loan current or the lender grants a loan mod. Her only income is her social security and a pension fund. She's being denied a loan modification because her payment is "affordable" compared to her income.

Possible solutions: Her mortgage balance is roughly 125k and her home is worth about 270k. Her monthly payment is $900 and current interest rate is 5.5%. She is bound and determined to stay in her home and willing to explore creative solutions.

I've run some numbers using a purchase price of 130k and a sale price of 260k. If she were to keep making her 900 payment in perpetuity until she passes the only variable would be how long she would be living in her home.

Here are the results:

5 year IRR: 18.02%

10 year IRR: 12.60%

20 year IRR: 9.78%

I've also considered a subject-to transfer, but I need to figure out how to keep her in her home with that option.

I appreciate any and all suggestions and please ask more questions so I can fill in the gaps. Will social media help out our homeowner? I'm ready and willing to find out!

Thank you bp community,

Collin