My step-daughter who is a widow is facing foreclosure. She has just become two months deliquent on her mortgage. Her husband died when she was carrying her second child. She just can't keep up with the payments now. My wife and I do not have a lot of money but we have good credit. She owes $92,000 but was told by the lender that now the house is only worth $63k. No one will re-finance her with a fixed rate loan she could afford. Is there anyway my wife and I could buy the house and rent it to our daughter? What about doing this after/during foreclosure? Thank you

A lot depends on where the lender is at in any pending foreclosure process. If nothing has been started in the way of legal action you might be able to catch up her payments (which will include penalties and interest) to get enough time to work out a deal with the lender. Possibly they would let her sell it to you on a "short sale" (closer to market value) but they might hold out for the full balance. It sounds like you would need to finance it yourself so if they won't do the short sale you would need to make up the difference from other funds (assuming you have some available). I think you should see a lawyer to help you navigate the issues.

Maybe the new mortgage bill can help her out?
http://www.hud.gov/news/recoveryactfaq.cfm

bobb78

Throw emotion out the window, this is now a business decision.

My advice, don't make any more payments, list with a broker subject to a short sale.

What is the lender's options, short sale or end up with another reo. Check value, $63k may be to high, make an offer for 20% less then your value or theirs, whichever is lower. Line up a lender now, the bank will want you to show them the money.

Don't become a casualty of the initial problem.

Worst case, foreclosure,your stepdaughter gets some free rent for as long as she can, gets rid of a debt load she can't handle, later rents a place she can afford, or moves in with you for awhile, or you assist with her rent for awhile while the dust settles (e.g. co-sign lease), or last resort files BK (if bank won't forgive deficiency or other factors).

Doesn't have to be the end of the world, can be a new start.