Lilly Garcia Realtors
8308 Precinct Line Rd
Colleyville, TX 76034
ph: 8552000723
lilliann
Following are the most typical home retention alternatives.
A Special Forbearance is a written agreement between the mortgagee and a mortgagor that consist of a plan enabling the mortgagor to reinstate their loan.
A forbearance can help a homeowner avoid foreclosure and keep his home. Forbearance is a temporary halt or reduction in mortgage payments that allows a borrower time to work through a difficult financial situation and catch up on missed payments. Special forbearance is available for homeowners with loans backed by the Federal Housing Agency (FHA.) A homeowner can be eligible for an FHA forbearance if he loses his job or has a sudden loss in income due to other circumstances, such as a death in the family or serious illness.
FACTS
•Leads to restatement of the loan.
•No maximum duration.
•Maximum arrearage due may not exceed 12 months arrearage Principal, Interest, Taxes and Insurance
•Must be in writing and state previously missed mortgage payments.
•Provide failure options.
SPECIAL FORBEARANCE TYPE I
•Special Forbearance installment must be based on the mortgagor’s ability to pay.
•May allow reasonable foreclosure costs and late fees accrued prior to execution of the agreement.
•Minimum duration of 4 months with no maximum length of time to repay the arrearage when required payments are increased.
•Minimum duration of 6 months with no maximum length to repay the arrearage; when required payments have a combination of suspended, reduced and/or full.
• Allow the mortgagor to pre-pay the delinquency at any time.
CAUSE OF DEFAULT IS UNEMPLOYMENT
•Mortgagor has a good payment history and stable employment history.
•Based on mortgagor’s ability to pay, mortgagee may require a partial payment; such as equal to monthly escrow requirement amount.
•Mortgagor agrees to actively seek employment during term of Special Forbearance.
•Mortgagor immediately notifies mortgagee when employment status changes.
SPECIAL FORBEARANCE TYPE II
A Special Forbearance Type II combines a short-term Special Forbearance with a Loan Modification or Partial Claim as a single loss mitigation option.
•Loan must be due and unpaid three (3) months, but not more than 12 months due and unpaid delinquent.
•Requires monthly payments of minimum of three (3) installments before completing the Loan Modification or Partial Claim.
•Must have verifiable reduction in income or increase in living expenses, but has or will have sufficient monthly income to correct the delinquency and reinstate the loan within the duration of the plan.
FAILURE OPTIONS
The following bullets provide the definition of Special Forbearance option failure. Theseoptions must be listed within the written Special Forbearance Agreement.
•The mortgagor abandons the property.
•The mortgagor advises the mortgagee that he/she will not follow through and fulfill the terms of the special forbearance agreement.
•The mortgagor allows two installments to become due and unpaid without any advisement to the mortgagee of any problems that rendered the mortgagor unable to stay current under the terms of the forbearance.
SPECIAL FORBEARANCE CLAIMS/INCENTIVE
•Mortgagees receive $100 incentive for claims submitted within 60 days of execution date of agreement.
•$200 incentive if mortgagee is ranked in Tier 1.
•If foreclosure occurs, HUD pays Note Interest Rate rather than FHA Debenture Rate.
We can assist you with your process but you can also do it yourself by following these six easy steps:
Contact your lender. Inform the lender you want to apply for the FHA's special forbearance program, as the application has to go through your loan servicer, and have your payment history reviewed for eligibility purposes. Request all the necessary paperwork and forms be mailed or faxed to you as soon as possible.
Gather the necessary documents. Proof of income is required, like pay stubs and prior year tax returns. Copy any bills you have, such as utility charges or medical expenses. You will need to show why you cannot afford to make the loan payments in full at the time of the application. Document your existing financial resources, like the balance in your bank or retirement accounts.
Explain to the lender that your finances will improve. The purpose of a forbearance is to allow a borrower in a temporarily bad financial situation to keep the home. You need to indicate that your financial hardship is only short-term and that you will be able to continue to make the rest of the loan payments in full after the forbearance period ends
Contact the FHA National Servicing Center for help with your lender. You can reach the center at 888-297-8685. The agents at the center can assist you with your lender and any problems you encounter while trying to obtain a forbearance on your mortgage, as per the Department of Housing and Urban Development (HUD), the government agency that oversees the FHA.
Contact a HUD counselor for help. HUD housing counselors can assist you with the forbearance process. Locate the housing counseling agency in your area by using the counseling agency search feature on HUD's official website. Call HUD at 800-569-4287 to use an interactive system to locate an agency. Consult with the agency about any possible fees for this service before your appointment; many services are free.
Negotiate the terms of the forbearance. Forbearances are granted for a specific period of time. Make sure the time you are given by the lender is enough for you to be able to make the payments once the forbearance period ends.
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Lilly Garcia Realtors
8308 Precinct Line Rd
Colleyville, TX 76034
ph: 8552000723
lilliann