finance work

Assignment 6:

Mortgage and Foreclosure Worksheet

Refer to Chapters 6, 12, 13 (2016 ed.), in Surviving Debt to find the information for this worksheet.

1. What is an Escrow account?

An escrow account, sometimes called an impound account,  depending on where you live, is set up by your mortgage lender to pay certain property-related expenses on your behalf. An escrow account is like a mandatory savings account, which is part of the mortgage payment and the purpose is paying insurance or tax. Lender automatically pays those expenses for the borrower. If no escrow set up, borrower must be sure to manage those expense.

1. What is a Qualified Written Request?

 A Qualified Written Request, or QWR, is a written correspondence that you or someone acting on your behalf can send to your mortgage servicer. A QWR can also be called a Notice of Error or a Request for Information.

1. What is Private Mortgage Insurance?

Mortgage insurance is common in residential mortgage transactions. It is referred to as “private mortgage insurance” (PMI) and is different than property insurance because it protects the mortgage holder from losses if borrower default on the mortgage. If the down payment was less than 20% of the purchase price, private mortgage insurance may have been required.

1. When you should or should not negotiate a workout agreement?

1. Do not initiate a workout when there are other finance problem that are equally pressing.

2. Be cautious about initiating a workout too close to a foreclosure sale.

3. You should determine if you have defenses to repayment.

4. Start workout discussion as early as possible

1. What to ask for in a workout?

1. General Consideration. The most important part of a workout negotiation may be deciding what terms to request from the servicer or lender.

2. Request a delay of any impending foreclosure sale.

3. Traditional payment agreements

4. Temporary interest rate reduction

5. Recasting of missed payments

6. Permanent modification of loan terms.

1. What is a Deferred Junior Mortgage?

Deferred Junior Mortgage also called a silent second mortgage. Lenders will allow a principal mark down if they can have a deferred junior mortgage. Deferred junior mortgages typically require payment only if the property is amount of principal reduction, which is the amount of loan. Also, It can not be enforced by foreclosure or lawsuit.

1. What are different types of foreclosure?

Foreclosure is a  legal process to terminate your ownership of real estate that is collateral for a debt,based on a mortgage or deed of trust.

1. Discuss your rights in the mortgage foreclosure process.

1. Preliminary notices

2. Notices of default

3. Notices of acceleration

4. The right to reinstate

5. Using bankrupt to cure the default

6. The right to redeem

7. H

1. What are some differences between Notice of Default and Notice of Acceleration?

Notice of Default/Delinquency

1. First notice sent

2. Informs about missed payments

3. How much is required to “CURE” the default

 Arrears

4. When you must make the payments by

 If you offer to and are able to pay the full arrears, the lender must accept it.

Partial payments are often rejected

Notice of Acceleration

1. Acceleration

Whole Loan Amount is due NOW

2. This notice may arrive independently or with the Notice of Default

1. How can you delay or stop the foreclosure process?