SALES & TRANSFER OPTIONS

NEW GOVERNMENT SPONSORED OPTIONS

FORECLOSURE OPTIONS 

REFINANCE/REPAYMENT PLANS

If you have incurred a short term financial hardship and your loan is two or more months past due, you may qualify for a repayment plan. You must be able to show “capacity” or the ability to make your mortgage payments in order to be eligible for this option. You must show you had a temporary hardship and are now able to make payments moving forward. This option is usually structured to cure the delinquency over a period of time by paying a full payment, plus a partial payment on the delinquent amount each month. Usually an initial down payment is required. The amount of the partial payment will be based on your financial situation and your initial down payment. It is important to note, a repayment plan will only be considered if there has been a positive change in your financial situation. For example, if you were previously unemployed but now have found new employment, a repayment plan might be considered if you can show you can afford the down payment and increased monthly amount due while keeping your real estate taxes current.

LOAN MODIFICATION

If you have incurred a long term financial hardship, your mortgage lender may modify the term(s) of your mortgage usually the hardship is a permanent reduction in income due to severe medical hardship, loss of spouse, legitimate increase in expenses and other permanent hardships . The lender may lower your interest rate and/or extend the term of your loan resulting in lower payments. Any additional liens or mortgages on your property must agree to be subordinate to the first mortgage.

SPECIAL FORBEARANCES (FHA Loans and some lenders provide similar services)

If you have incurred a short term financial hardship and your loan is 90 days to 365 days past due, you may qualify for a special forbearance. A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Approval can result in spreading the repayment over 12 to 18 months and some cases might include placing the past due payments at the end of the loan.

VA LOAN MODIFICATION/REFUNDING  (Available for VA Loans Only)

A refunding is when the VA purchases your loan from your existing mortgage lender. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan the delinquency is added to the principal balance and the loan is re-amortized. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate.

PARTIAL CLAIMS (FHA Mortgages Only)

You may qualify for a partial claim if your loan is 120 to 365 days past due. A partial claim is when your past due payments are placed into a subordinate mortgage (2nd mortgage) between you and the Secretary of Housing. Your lender will work with you to obtain a one time payment from the FHA Insurance fund to bring your mortgage current. When the lender files a Partial Claim, HUD will pay your lender t he amount necessary to bring your mortgage current. You will execute a Promissory Note and a Lien will be placed on your property until the promissory note is paid in full. The promissory note is interest free and is due when you pay off the first mortgage or sell the property. This will require you to start making payments when you pay off the first mortgage. There is no interest on the second mortgage. The partial claim can be for no more than 12 months of the past due payments.

DISCLAIMER:  This information was summarized from Websites and Press Releases from various organizations/companies including attorney websites, consumer information websites and lender websites for your convenience. FRG encourages each person to do their own research because results and qualifications can be different for each person’s own unique financial circumstances.