11 November 07 - 10:55Preforeclosure –5 Other Alternatives Homeowners May Be Considering

Buying preforeclosures can be a highly profitable real estate investing opportunity. If you invest in preforeclosure property, however, (or if you plan to), you need to understand the other options that a homeowner who is currently in preforeclosure or who is facing preforeclosure may be considering.

Forbearance Agreement – A homeowner who is in default, but not yet in preforeclosure, may be allowed to make low mortgage payments or no payments at all for a period of time (commonly 3-6 months). After that period of time, however, the homeowner is usually required to make payments that are higher than the original monthly mortgage payment until the loan is brought up-to-date.

Special Forbearance – If the homeowner has an FHA loan, he may be eligible to postpone making mortgage payments for a minimum of four months to avoid lapsing into preforeclosure. There is no limit to the number of months the homeowner may postpone payments, but payment delinquency is usually not permitted to exceed the equivalent of 12 monthly PITI installments or the preforeclosure process will continue.

(more)

lance - default - / No trackbacks - § ¶