Getting In Control Of Your Mortgage By Getting A Loan Workout Plan

Posted by Faizan Shiwani / at 4:52 AM / /

With the rise in foreclosures more and more people are looking for options to stop the process. As you search for help you may be thinking about a workout plan and if it is the right option for you. There can be many pitfalls to the workout plan process; here I will go over some of the most commonly asked questions and answers on the subjects.

What is a Workout plan?

A workout plan is where the mortgage holder, will adjust the note on your property, hopefully making the expenses more convenient and affordable for the homeowners. Most of the time the interest rate is lessened with a fixed loan program. Homeowners may find advantages such as conversion of an adjustable loan into a fixed one, leaving you with a lower interest rate. Workout plan can make they payments of your mortgage lower and possibly help you steer away from foreclosure.

How Can I get A workout plan?

In order to be eligible for a workout plan homeowners need to be 61 days or 3 full payments behind on their loan. A minimum of 12 months needs to have gone by since the loan was first prearranged. The loan may not be in foreclosure when executed. The loan modification mortgage should stay in the first lien position.

Also the homeowner/borrower should not have another FHA-insured mortgage. The borrower should be the owner occupant or commit to live in the property as principal residence. The borrowers should have enough stable income, to stay on top of the new payments. They must prove that they can do so and that they have the income.

What is the workout plan Process?

-First the mortgagee will assess the mortgagor/borrowers financial state.

-An escrow analysis will usually be done by the lender to compare if the actual escrow requirements correspond well to the delinquent payments that are being capitalized.

-The lender has to comply with the disclosure laws or notice requirements of the state and federal government, each state law can vary.

-Then they will determine if records are needed to keep the first lien position.

-They will also make sure that the property is in decent physical condition; home repair costs may not be intergratedincluded in the mortgage. Any negative physical conditions may influence the mortgagors ability to support financially. Both the interior and exterior may be looked at.

Can I try and Get a workout plan on my Own?

Experts advise that you do not try and get one with out help. It is hard to talk with banks as an individual and to get them to work with you. Especially when they are swapedwith request all day long. It is better to find someone to help negotiate with the mortgage holder and get a workout plan for you.