What are the options if you can no longer afford your mortgage?
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What are the options if you can no longer afford your mortgage?
My dad has been unemployed for 3 years due to diagnosis of Alzheimer’s. I have been making the payments on his mortgage and he has been paying mine because they are considerably less. He is on a fixed income of social security with my mom. Their total and only income is $3062 per month. I cannot keep up with it anymore. If we stop making mortgage payments what is likely to occur? Since this is CO, will it go through courts or happen immediately? I have tried the making home affordable but was denied. Would bankruptcy help?
Asked on September 10, 2011 under Real Estate Law, Colorado
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If there is equity in your father's home and paying the mortgage is becoming too difficult, placing the home on the market and downsizing is the best course of action to take in his and your situation.
Another option depnding upon your father's age and the equity in his home is looking into a reverse mortgage where he can stay in the home and the equity in it services the home's debt load.
Depending upon your parents' other debts versus their assets, a bankruptcy filing may be an option. In order to see if this is an option, they should consult with an experienced bankruptcy attorney.
If your parents stopped making payments on the home, it would go into foreclosure and it would be sold to pay the amount owing on the loan. Depending if the loan is purchase money or not, and if Colorado has anti-deficiency laws, the lender could or could not go after your parents for any deficiency on the sale of the home.
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