BiggerPockets

Originally posted by Priscilla Z

I have been asked to accompany someone to the courthouse tomorrow for their foreclosure mediation. Can someone tell me what to expect and any tips I might be able to give her?

Thanks.

Are you a buyer, agent, or friend? Likely you will be asked to clarify your role,your intentions, and be asked to provide some capacity.

Care to share what it was like?

Of course I'll share it....here goes:

She's a family member, and her husband is out of town on a family emergency so she asked me to go with her since she knows I'm into real estate.

When we got there the mediator had us wait until the lawyer got the loss mitigation specialist from the lender on the phone. So it was her, me, the mediator, the lawyer, and the loss mit person on the phone. (Since I'm a family member I was allowed in as long as I did not cause trouble...me? :roll: )

The mediator began with the formal stuff, then they proceeded to ask her about the numbers on the financial papers she had turned in to them. They told her that they knew she had turned in a loan mod packet, but, that they were going to try to qualify her for the HAMP, or for their internal modification program so that she could keep the house.

I won't get into too much unnecessary details. They gave her a list of the items she needed in the loan mod packet and then, after that long conversation, the mediator asked what her other options were if she did not qualify for the HAMP or their other modification program.

The loss mitigation person said that her other options were:
1. Repayment plan (which would add her arrears to her current mortgage payment, making the payments even higher).
2. Settlement - getting a loan from another company to pay them off
3. Short sale
4. Deed in lieu of

And then....the highlight of my morning.....the LAWYER intercedes and says..."Or she can do a short sale re-fi"

I said I hadn't heard of the, the mediator said the same, so the lawyer explained that it was like short selling the house back to herself.

(Now, just a little bit of info....in this case, she is on the mortgage and the deed, but not on the note. From what the mediator told me, this is a good thing and the mortgage being late will not affect her credit. - I of course need to research this myself).

So, I asked "Your company does this?" and they said YES.

And that's it! The highlight of my day!!!! I learned something new. I also learned that anyone living in the house, such as her son, etc, can write a letter stating that they contribute and pay rent (if in fact they do) and that could help with the loan modification.

I have to say, I'm VERY glad I went, it was one of the best hands on learning experiences I could have.

I started another post in the short sale forum to see if anyone knows about this short sale refinance, because I want to see if this might be an option for her.