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The usual issues in a workout with the lender

Your ability to repay and become current again will obviously depend on your particular circumstances. They will want to know: Did you lose a job in which it will take time to find alternative employment?

How much will you be able to pay towards your loan until you can secure new employment? The lender will usually focus on two issues: will you be able to make future payments and will you be able to pay back the arrears or past due payments and when? In this regard lenders want to see you begin making payments again immediately while you work out the details of paying back the arrears.

Suspension of your full monthly payments

Lenders who are serious about a negotiated work-out will normally allow you to suspend your obligation to make full monthly payments for a period of months Ð suspension of your full payments will rarely go beyond five or six months. In that time period the lender will ask you to make a reduced payment to demonstrate your good faith. In this time period your lender will expect that you will be able to resume making your full monthly payments.

Negotiated terms for the arrears - missed payments

The lender will usually require you to make partial payments against the payments you have already missed and are now past due. Again, many lenders will give you a fixed time in which to pay off your arrearage but rarely will agree to a time beyond six months to completely payoff your arrearage.

Negotiation as an art not a science

Remember, negotiation is an art not a science. The good news is that both you and your lender share the same goal Ð avoid foreclosure and have you, the current borrower, resume your loan payment obligations as soon as possible. Since both you and the bank share the same objective, it is advisable that you be flexible and find ways to agree rather then disagree. If you have the resources, it is strongly recommended that you seek the advice of an experienced real estate lawyer to help you negotiate the terms with the lender.

Military Exemption - Protected Status

If you or your spouse is in active duty, you may be entitled to protection from foreclosure proceedings and may be also qualify for suspension of payments during the time you are serving in the military. The rules in this regard are quite fluid, especially in time of war, so you will want to contact an experienced lawyer who is familiar with the Soldiers and Sailors Relief Act (SSCRA) to find out whether you or your family member qualifies for this special status.

   
 
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