BiggerPockets

"they owe the bank $295,000"

NO according to YOU she is on title but not the mortgage.If that is true she owes NOTHING to the bank.She just has a partial ownership by title with a property that is underwater in value.

Even if it forecloses she can milk some more months as a "tenant at will" before the bank can get her out.Usually they will offer "cash for keys" for her to move.This time of year with court delays for evictions it would most likely take the bank awhile to get her out.

She could always try to get the husband to sign an "authorization to release" from giving her the authority to speak about the loan to her.

With an underwater house most owners/tenants just care about the mortgage payment.

Example house was worth 200k but now worth 130k.

Mortgage payment is currently 1,600 but owner/tenant wants payment of 1,100.The bank might readjust the loan payments rather than foreclose and take a big loss.It depends on what type of loan it is and who owns it and workout options.

If you bought it for cash at foreclosure then she could stay as a tenant and you have her sign a lease and she rents from you.The details will be based on a state by state basis with time lines and risks involved.

She could try to buy the note at a discount or get an investor to try to purchase it on a short sale and rent to her etc.

The confusing part of your statement is you said she had 150,000 cash but yet recently filed bankruptcy.Are your sure the husband didn't file bankruptcy and she received the money from the proceedings??

There is a lot of expense maintaining a property these days.

If I had that kind of money I would put it to use so she doesn't burn through it fast and spend it.She might be better off just renting somewhere and taking the cash for keys money.Sounds like the husband has let everything go and doesn't care anymore.

no legal advice

She has 150k in the bank and filed a bk 8 months ago? I would not transact with someone like that. Help her all you want, but I would never be a seller, landlord, or holder of paper on a deal with someone like this. Clearly, she has the resources to pay her bills, but has chosen to avoid responsibility. Her situation sounds shady to me. Not trying to hammer your friend, just a little unsure as to how far you're trying to go to help this person.

oH.... that's just terrible, but makes a lot more sense of things... It's amazing how quickly lottery winners blow through their $$.