- The
eligibility requirements for a Special Forbearance
Agreement are:
- The
owner must be occupying the home.
- The
mortgagee must have experienced a reduction in income
or an increase in expenses.
- The
mortgagee must have the ability to pay the terms of
the forbearance agreement.
Several
other significant facts regarding Special Forbearance
Agreement are:
They can be executed no earlier than the 4th
missed payment (91 days) and no later than the 7th
missed payment.
The delinquency is not to exceed the equivalent of 12
months of Principal, Interest, Taxes and Insurance (PITI).
There is no restriction as to the length of the Special
Forbearance Agreement.
Mortgage
Modification:
The
requirements for mortgage modifications are:
- The
borrower is unable to reinstate or use a forbearance
agreement to bring the debt current.
- The
borrower does not have another loan with the Investor,
Insurer, Servicer or Mortgage Company.
- The
borrower must occupy the house.
Several
notable facts about mortgage modifications are:
- The
interest rate may be reduced, but may not be
increased.
- Only
one borrower’s signature is required unless state
law requires otherwise.
- The
term may be extended up to 10 years past the original
maturity date.
- The
mortgagee must maintain the first lien status of the
mortgage.
Partial
Claim:
The
eligibility requirements for a partial Claim are:
- The
home must be owner occupied.
- Partial
claims may be executed no earlier than the 4th
missed payment.
- Income
verification is required.
- The
mortgagee must meet debt/income ratio (unless
Investor, Insurer, Servicer approves a variance).
- A
credit report is required.
- The
claim cannot exceed the equivalent of 12 months PITI.
- Only
one borrower’s signature is required if the transfer
of title is legally executed and filed of record.
- The
transaction must comply with State law.
-
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Pre-Foreclosure
Sale:
The
eligibility requirements for a pre-foreclosure sale are:
The
residence must be owner occupied. (Houses that are rented
out or vacant are considered on a case-by-case basis).
The loan must be at least two months (32 days) delinquent
at the time of closing
This must be an arms length transaction.
The ration of "as is" value to outstanding debt
has to be at least 70%. (It can very to 63% with Investor,
Insurer, Servicer or Mortgage Company approval).
The gross sales price must be at least 95% of the "as
is" appraised value.
The ratio of estimated net sales proceeds to "as
is" appraised value must be at least 87%. (It can
vary to 82% with Investor, Insurer, Servicer or Mortgage
Company approval).
The mortgagee must be without the resources to bring the
debt current.
Foreclosure must be inevitable.
Deed-In-Lieu
of Foreclosure:
A
mortgagee in default can give back the property to the
lender.
This
will increase his/her chances of getting a mortgage loan
in the future. A mortgagee should try this option if (1)
he is in default and doesn’t qualify for any of the
other options; (2) doesn’t have another mortgage in
default; and (3) is unable to sell the house before
foreclosure.
The
eligibility requirements for a deed-in-lieu of foreclosure
are:
- The
mortgage must be in default.
- The
property must be owner occupied. (This requirement may
be varied on a case-by-case basis.)
- The
borrower must not be qualified for any other loss
mitigation tool.
- The
lender must be able to obtain clear title.
- All
legal owners must sign deeds.
- Junior
liens must be paid off.
- The
lender must execute and record legal instruments.
- The
lender must convey property to Investor, Insurer,
Servicer or Mortgage Company.
