Loan mod on inherited house

[ElloriW]

I was in the middle of trying to get my mother's finances in order while she was undergoing cancer treatment when she unexpectely died. We had started the first stages of a loan modification with a broker, but we had NOT submitted anything yet to the lender (GMAC).

My mom had put the house in a revokable trust with me as the trustee, and left the house to me. She owed on it more than it was worth (she had just purchased it before the market collapsed, taking a 20 percent downpayment with it), and while I made her payments for several months, they are around 45 percent of my income and beyond my means to sustain. I stopped paying the mortgage a few weeks before she passed away.

GMAC has my application under review, and I'm still living in the house. The taxes are current. I'm not paying anything to anyone. I am not on the loan and GMAC has no recourse against me at all for not paying -- I have not even distributed the house to myself, so at the moment, I don't own it -- the estate does. (Yes, I have an attorney.)

So here's my question: I've gotten the impression that all, most, or some lenders require that you pay 3 months of mortgage payments BEFORE they tell you that you can really truly have a loan mod. I'm very reluctant to do this, as I don't actually owe GMAC anything, and I have no skin in this game at all -- I can walk away and it won't hurt my credit or put me on the streets. I don't want to fork over thousands of dollars and then get told when it's over that sorry, we won't modify this loan after all, but thanks for the cash, sucker!

In case anyone is wondering, yes, my mom had a predatory loan that she did not understand, she lost all her income (which came from a real estate related family business) in 2007 (which is why I was making her payments for her), and market rent on this property would be less than half the current mortgage payment.

My loan modification professional (who doesn't charge an upfront fee -- they are one of the good guys, believe me, I researched this one) has not dealt with a situation like this before, and isn't sure how the trial payments issue will be resolved. I do not qualify for the government programs, so this will be what she called an "in-house workout," and she said that GMAC can do pretty much whatever they want as far as working out the loan goes. She said she does not think they'll deny it, although, of course, I know they might.

I thought someone here might have some thoughts on how the trial period might work, in general or in this case specifically. This has been a dark and terrible time, and I'm full of grief, and I'd like to try to hold onto the house if I can. I have excellent credit and a good income... it's the real estate market and my mom's old, horrible loan that are the problem.

Thank you very much!

[Sunbeam]

I'm so sorry for your loss. I had a thought which may be nothing...what if the loan is foreclosed and you purchase the house through a foreclosure. It really seems like you are in the driver's seat with GMAC...I mean what are they going to do? Perhaps they could short sell to you? Good questions for your attorney. Best to you.