Hey Dwan>>Try again!
I posted this earlier and got one helpful answer. Sure would like to here other opinions so HERE GOES!!!
What criteria will a lender look for to qualify a home owner for a possible forbearance agreement? Do they start with gross income less debts to see if there is room for a monthly payment needed? Stability of income, past payment record, cause of current problem, etc?
In other words….what is a good formula for me to apply to see if borrower has a chance at a forbearance agreement??
frankCA,
Forebearance Formula:
L = Letter from Seller giving you authorization to call the lender as their Financial Advisor. (In this case you are, because you are trying to help them financially.)
P = Pick phone call the lender.
A = Ask the lender how the payments can be brought current or how they will work with you. What are they willing to do to help the sellers.
L + P + A = Answer to your question.
This again is not Rocket Science if you do not ask you will never know. You must be prepared to work out terms if you are buying the property, so know how far you are willing to go to help yourself and your sellers.
John $Cash$ Locke
Hi Frank,
Forebearance agreements are a piece of cake.
When you call the bank on the homeownerrs behalf, you'll need an "authorization to release information" form first.
The bank is looking for proof that the homeowners can now resume their mortgage payment. They bank will ask for the monthly net income and all the monthly debts. If the income is more than the debts, the bank will most likely work out a payment plan.
Keep in mind that while a homeowner is in the forebearance agreement, they are still in foreclosure statis. This means that if the homeowners miss a payment they will be right back in foreclosure,m right where the bank left off.
A typical agreement looks something like this.....
Homeowners have a $500 per month mortgage payment. They are $3000 in arrears. The bank agrees to accept $1000 down and the $2000 balance over 12 months. $2000 divided by 12 months is $166.66. This makes the new mortgage payment $500 plus $166.66 for a total of $666.66 for 12 months. After that, the payment drops back to the original amount. Be CERTAIN the homeowners can afford the new payment, otherwise you will make a bad situation worse.
We usually charge anywhere from $500 to $1000 as a consulting fee for working out forebearance agreements. Keep in mind that many homeowners will fall out of the agreement and when they do, they will hopefully call you because you helped them the first time.
Good luck,
Dwan