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Forebearance of Mortgage Agreement

by Doug & Gwen Campbell at Sun Bay Associates

Forebearance agreement

 

Previously, we talked about different options to avoid foreclosure on a mortgage.  Today we will address a forebearance of mortgage agreement.  This is not a definitive discussion and we strongly suggest you consult with an expert in your area. 

 

A forebearance agreement is only one of several ways to avoid foreclosure.  It is simply an agreement between the bank and the borrower or homeowner to delay payment of the monthly payment for a specified amount of time.  The borrower usually has to be able to make a payment of at least 50% of the delinquent amount and can pay back the full amount due within two years.  If there is a lot of equity in the house, the borrower might be able to refinance the house to cover the amount due.  Refinancing could salvage the house, but is very likely to result in a much higher interest rate on the new mortgage.  The higher interest rate may be worth it to save the equity in the house.  Of course, if there is little or no equity in the house, refinancing is not likely.

 

Unfortunately, national statistics show that it is very likely that the borrower/homeowner who has fallen behind on the present mortgage is going to default on the new note within just a few months to a year.

 

Next time, we will address the relative merits of seeking a forebearance agreement or going with the short sale option.  To learn more about the short sale option to avoid foreclosure, visit www.YourHouseOptions.com.

You Have Options

by Doug & Gwen Campbell at Sun Bay Associates

Do you live in the greater Tampa Bay area and love it, but are having a hard time making your mortgage payments?  If you purchased a house in the last few years when the market was hot and now that the market has cooled off you might have a house with no equity that is simply not worth what it cost only a couple years ago.  With the economy in the condition it is in now, people are struggling to make their mortgage payments.  No matter the reason, if you can’t make the mortgage payments you are in a very stressful situation.

 

There are options, however, to avoid foreclosure.  Among the options available are:  forebearance; deed in lieu of  foreclosure; restructured loan;  renting the property, or, there may be an option most people don’t even consider, called a short sale.  This is when the house is worth less than what is currently owed to the bank, based on the current market conditions, there is no chance of selling it for enough to recoup the original investment, and the bank will agree to it. 

 

In the next few blogs we will discuss a little more of each of these options.  In our next discussion we will address a forebearance of mortgage agreement.

 

Remember, there are always options, foreclosure does not have to be the only way out of a temporary financial difficulty.  Visit www.YourHouseOptions.com for more information.

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Photo of Gwen and  Doug Campbell - The Campbell Team Real Estate
Gwen and Doug Campbell - The Campbell Team
at Keller Williams Realty
30522 US Hwy 19N, Suite 107 S
Palm Harbor FL 34684
Doug's Cell 727-741-4189
Gwen's Cell 727-741-7260
Fax: 888-447-7908