What Would You Suggest to This Family?

[Patrick Hancock]

Hello and thank you for any and all suggestions in advance,

I have a friend (wife with a husband and two children) who purchased a home two years ago using a private money loan at 12% with the plan of refinancing after twelve months.  Their credit scores were too low to obtain traditional financing.  Long story short husband lost his job when COVID hit and wife's work hours were reduced. Their credit scores did not improve and now they are struggling to make their mortgage payments.  They can't refinance using traditional financing and my suggestion was to sell the house (Market value of $300K and they owe $180K) while the market is high, rent something much smaller and wait for a market correction if it comes to buy back in at a lower purchase price.  However at this point they are wanting to try and keep the house.  Once again thank you for any and all suggestions,

Pat