thanks, @Bsch4477 - since the conservatorship revokes her right to make such a written agreement in current situation (even though she does want to grant ownership) - we will continue to go through the next steps of seeking "Power to Amend Title" from probate court first; they do not consider her opinion, but they will either review in probate court auditing process or else may force us to file an official petition through attorney, which gets pretty expensive fast - but we will not be on the defensive vs. IRS so likely best plan.
then apply for refinance with existing lender as they have indicated that would accept new application and are fully aware of our legal situation. I imagine, we could try to push it, claim the deduction, get audited and wind up in tax court for a ruling, but this is no longer an emergency since loan mod was completed
