|
|
|
|
|
|
|
|
A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford. Question 1: In utilizing the Loan Modification option to bring an asset current, can the mortgagee include all fees and corporate advances? Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified principal balance. Question 2: May a mortgagee perform an interior inspection of the property if they have concerns about property condition? Answer: Yes, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor's continued ability to support the modified mortgage payment. Question 3: Can a mortgagee include late charges in the Loan Modification?
Question 4: When utilizing a Loan Modification option, can a mortgagee capitalize an escrow advance for Homeowner's Association fees? Answer: HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage. Question 5: Is there a new basis interest rate which mortgagees may assess when completing a Loan Modification? Answer: Yes, Mortgagee Letter 2008-21 states that the new basis interest rate is 200 points above the monthly average yield on U.S. Treasury Securities, adjusted to a constant maturity of 10 years. Question 6: Will HUD subordinate a Partial Claim, should a mortgagor subsequently default and qualify for a Loan Modification? Answer: If a mortgagor subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim. Question 7: Are mortgagees required to perform an escrow analysis when completing a Loan Modification? Answer: Yes, mortgagees are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized. Question 8: Is the mortgagor eligible for the upfront premium refund at payoff of a modified loan?
Question 9: Can a mortgagee qualify an asset for the Loan Modification option when the mortgagor is unemployed, the spouse is employed, but the spouse name is not on the mortgage?
Loan Modification at our Law Office:
|
|