Hi this is David Anderson on behalf of Expert
Village talking about the foreclosure process in particular number thirteen “What is a workout
plan?”. Now this is meant for discussion and not for legal advise. Please consult a attorney
for legal advise. Most all references are being made about a trusty foreclosure. One
of the choices you have is a workout plan your lender has options that they can give
you when you are stumbling for foreclosure. They usually require that you are ninety days
behind before they would workout a plan with you. You must contact them or at least answer
their calls or letters this sends the right message and maybe you can workout some kind
of deal to save your house. Here are some of the workout plans offered: a repayment
plan this is where you work out a deal with your lender and they let you pay the past
due amount and fees over a period of time. The forbearance plan this is where you lender
agrees to reduce or suspend stop payments due for a while so you can cover and get back
on your feet. Loan modification the lender can choose to reduce the interest rate or
payment amount on the entire loan so you can make the payments. Loan assumption the lender
would sometimes ask other to assume your payments and your loan. Preforeclosure sale in this
process; the lender will allow you to sell the property before the auction and allow
any shortages to be considered adequate to clear the loan. This is sometimes called a
short sell. Deed in lieu foreclosure; the lender does not like this too often but sometimes
they would simply let you give it back to them the deed in lieu foreclosure on the property
and they will consider it good. In any workout plan, you would probably need give the lender
documentations, the lender would almost always want a hardship letter. The letter need to
know what sets of circumstances caused you to go into default in there loan. The reason
should be something that you are not in control of like a job layoff or medical reasons, divorce,
etc., they want to know how you are doing now and why they should consider a workout
plan for you right now. They would want a packet including the hardship letter and pay
stubs. The lender would want to see that you are earning a income and what amount that
income is. They would want to see pay stubs for the last four to two months. They would
also want to see tax returns, the lender would want to see the last two years tax returns.
They are basically trying to qualify you just like they did for the new mortgage that you
originally got. The financial statement; the lender would want to know all of your expense
and incomes and any assets you have at this time. They want to see a quick glance at what
your abilities might be so they can decide what workout plan would be best for you. It
has been my experience that this is where a lot of good people turn bad they are hurt
and they had enough and it is no business of the lender to know this information. The
lender has the right to know and you really want to let them know. If you want to keep
your credit and your home you need to work with them while they are still asking for
this information. Once they stop asking for it they may not let you give to you then not
even though you beg them. This has been David Anderson on behalf of Expert Village talking
about the foreclosure process in particular what is a workout plan.