DST H.O.M.E. Home Ownership Maintenance and Education Keeping Your Home: Homeownership Preservation

The Real Estate Headlines Credit Crunch Marks End Of Boom Home Prices Continue To Decline Short Sales & Foreclosures Increase More Investors Buying Homes Housing Related Businesses Are Closing Doors Housing Inventory Is At An All Time High The Government’s Housing Package

Terms To Know Forbearance lender may decide not to take legal action when a borrower is late in making a payment. Usually this occurs when a borrower sets up a plan that both sides agree will bring overdue mortgage payments up to date. Repayment Plan an agreement between a lender and a delinquent borrower where the borrower agrees to make additional payments to pay down past due amounts while making regularly scheduled payments. Mortgage Modification a loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments. Short Sale in real estate means the lender is accepting less than the total amount due

with temporary reduction of income or increase in expenses with permanent reduction of income Cure the delinquency: repayment plan, forbearance agreement, loan modification, or Borrower Assistance Program Mitigate losses and avoid foreclosure: preforeclosure sale, Deed-in-Lieu of Foreclosure, loan assumption Homeowner Preservation Short-term hardship…Long-term hardship…

Homeowner Preservation Options Borrower Assistance Program (BAP) Loan Modification Repayment Plan $ + $ + $ = Forbearance Agreement BAP/Mod +

Homeowner Preservation - Repayment Plan The Situation: Temporary curtailment of income which has since been resolved The Solution: Mortgagor agrees to bring loan current within a given time frame by making scheduled payments toward the delinquent amount in addition to normal payments

Homeowner Preservation Options -- Repayment Plan Questions to ask that helps you figure out what’s best for you: How much is needed to fully reinstate the mortgage? Can I keep the loan current after it is cured? When will I be current? How much can I pay in addition to my regular payment?

Homeowner Preservation Options - Forbearance Agreement The Situation: Borrower has suffered a temporary financial setback…but will soon have funds to pay back the amount owed The Solution: Servicer and MI company agree to delay foreclosure Borrower promises to pay entire arrearage (or full debt) by a specific date

Homeowner Preservation Options Forbearance Agreement Where will the borrower obtain the money? Questions to consider: Can These funds be verified? On what date will the funds be available? Can the borrower keep the loan current after it is cured?

Homeowner Preservation Options The Situation: Do I have... Desire to retain property Desire and ability to make payments No equity Employment (to start within 90 days or steady income source) The Solution: Borrower signs Promissory Note... Zero % interest Term determined by Lender/ MI Company (average 10 year term) Investor approval

Homeowner Preservation Workout Options Does borrower qualify for a forbearance plan or modification? Does the borrower have equity in the property? Can the borrower afford the mortgage payment + additional payment? Questions to consider:

Homeowner Preservation Options Loan Modification The Situation: The borrower has experienced a permanent change in ability to make payments and all facts and circumstances indicate a likely resolution of the delinquency. The Solution: Modification of... Interest rate Product Capitalization and/or Term To effect a permanent cure

Homeowner Preservation Options Loan Modification Do I desire to keep the property? Will the investor/lender approve of the modification? Do I... have funds to bring loan current... or qualify for a BAP? have ability to keep loan current? Do I... have funds to bring loan current... or qualify for a BAP? have ability to keep loan current? Questions to consider:

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