Keeping Your Home
The following summarizes solutions that allow the homeowner to keep their home. All of these solutions require a thorough analysis of the homeowner’s income and expenses.
• Refinance - A new mortgage on the loan with no change in ownership. The ability to refinance a loan requires that the borrower not be delinquent and that there be equity in the home.
• Repayment Plan – Plan where delinquent payments are distributed over a period of time, usually no more than12 months. The monthly amount is added to usual mortgage payment resulting in a higher payment until the delinquent amount has been repaid. This repayment plan brings the account up-to date within a specified time frame.
• Loan Modification - Past-due interest and escrow to the unpaid principal balance, which is then re-amortized over a new term. Rate adjustments, term extensions, and principal forgiveness may be considered. Loan modification results in permanent, contractual changes in one or more mortgage terms. Additional loan fees may be involved based on the type of the mortgage a customer holds and on the specific investor. A loan modification immediately brings the account up-to-date.
• Partial Claim - HUD advances a loan to repay the past-due interest and escrow amounts. The loan is due and payable when the borrower pays off the first mortgage or no longer owns the property. The loan is interest-free and the account is brought up-to-date immediately. Only allowed on FHA loans.
• Forbearance – A temporary reduction or suspension of a borrower’s payment. The repayment plan is based upon the customer’s financial situation. Because of long-term implications, this option is used only in severe hardship cases.
