In Tough Times, YOU NEED TO KNOW YOUR OPTIONS WITH YOUR PROPERTY....
Kinds of loss mitigation (Loan Modification):
Loan Modification: This is a process whereby a homeowner's mortgage is modified and both lender and homeowner are bound by the new term. The most common modifications are lowering the interest rates, increasing the loan term, forgiveness of payment defaults & Fees, or any combination of these
Short Sale: This is the process whereby a lender reduces the principle balance of a homeowners' mortgage in order to permit the home owner to sell the home for the actual market value of the home. This specifically applies to homeowners that owe more one their mortgage than the property is worth. Without such a principle reduction the home owner would not be able to sell the home.
Short refinance: This is a process whereby the lender reduces the principle balance of a home owner's mortgage in order to permit the homeowner to refinance with a new lender. The reduction in principle is designed to meet the Loan-to-Value guidelines of the new lender (which makes refinancing possible).
Deed in lieu: A Deed in Lieu of foreclosure (DIL) is a disposition option which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosures may no be accepted from mortgagors who can financially make their mortgage payments.
Cash-for-keys negotiations: This is a variation of the deed in lieu of foreclosure. The difference is that the lender will actually pay the homeowner to vacate the home in a timely fashion without destroying the property. The lender does this to avoid incurring the additional expenses involved in evicting such homeowners.
Special Forbearance: This is where your lender will allow you to make no monthly payment or a reduced monthly payment. Sometimes, the lender will ask you to be put on a repayment plan when the forbearance has been finished to pay back what you missed, while other times they just modify your loan. (citation needed)
Partial Claim: Under the Partial Claim option, a mortgagee will advance funds on behalf of the mortgagor in an amount necessary to reinstate a delinquent loan (not to exceed the equivalent of 12 months PITI). The mortgagor will execute a promissory note and subordinate mortgage payable to United States Department of Housing and Urban Development (HUD). Currently, these promissory or "Partial Claim" notes assess no interest and are not due and payable until the mortgagor either pays off the first mortgage or no longer own the property.
Comments(0)