Here is probably the unfortunate truth:
*Foreclosure papers means she has missed payments - likely a number of them.
*Said missed payments has likely decimated her credit score.
*Current credit market is very tight unless you have good or better credit.
..so a "refi" is gonna be real hard to get.
Did anyone call the current mortgage company and see if they have any programs to alter terms, etc.? Most of them do now. Plus I thought there might be some federal programs out there. Do some googling, maybe start at the FHA.
Edit: look here:
http://www.hud.gov/foreclosure/
Edit2:
http://www.federalreserveeducation.o...d/foreclosure/