You are throwing money down a Hobbit hole. You are literally burning it. I admire that you wish to help your dad but you are both making a mess of this strategically.
Unless there is a Hail Mary pass in the near future that gives him lots more cash flow he is going to lose the house. Period. Any money you give him to pay the mortgage at this point is money flushed down the toilet. It’s not building equity, it’s just going to be gone in the wash when he defaults and the house is eventually sold. He would be better off defaulting on the mortgage and moving to a short sale. Depending on where you live he could possibly maintain non paying occupancy of the residence for a considerable amount of time.
Propping him up with cash is pointless unless there is near term solution to his cash flow issues. For God’s sake hold onto your cash, giving it to him to support the mortgage which will implode in the near future is insane at this point.
The *only *rationale to keep the mortage intact would be if he really got onboard with doing a quick sale at a bottom line price that lets him escape with his credit intact. If his credit is a mess already a short sale dinging his credit will hardly matter.
Well Dad didn’t want to accept any money from me anyway and says he should have enough money to try and make it until September when he can apply for the HARP refinancing loan.
I am planning on semi-moving in with him in a few months at his house (really will be doing a lot of travelling but he’s going to take care of my cat for a while and some of my stuff will be there), so I’m going to be paying him some rent to do that for me, which is a mutually beneficial arrangement.
My son, if I, Hafiz, thy Father, take hold of thy knees in my pain,
Demanding thy name on stamped paper, one day or one hour – refrain.
Are the links of thy fetters so light that thou cravest another man’s chain?
If you can’t afford the payments on your house, you need to sell it or bring in roommates to help pay the mortgage for you. The latter is more shaky than the first, since you’ll always have to have roommates who are paying regularly. I’m very glad to hear that you aren’t planning to help with your father’s re-financing (that was, as everyone said, a terrible idea for you), but if your father can’t afford his house, he can’t afford his house.
I’m sorry he lost his business, and might still lose his house, but it isn’t the end of the world if he has to sell and buy something cheaper (or rent something within his means). He’s still alive, he still has his wife and you and everyone else in his life who loves him.
Another reason he should try to sell the house is that in his financial condition it is very likely that the house will fall into disrepair, making it more likely to be hard to sell when he finally makes that decision.
What I did when I was in this position was to have my parents sell their home and I bought a condo for them. I rented it to them for what they could afford and my two brothers helped me suck up the difference. There are some tax advantages in this arrangement. Of course they were able to realize enough from the sale of their house to fund the down payment on the condo, so that helped. For me and my brothers it turned out to be money well spent. When my father died, we sold the condo for enough of a profit to fund my mothers assisted living and nursing home costs and there was even a few thousand left after my mom died. We were lucky.