Mortgage Loan Workouts

texas mortgage foreclosure alternativesLenders and borrowers often prefer to avoid foreclosures. Short sales and deeds in lieu of foreclosure are two methods that may be employed to accomplish this objective. Workouts are a third option.

A major premise of a workout is that institutional lenders would rather receive loan repayments than engage in foreclosure and/or litigation proceedings.

A workout is just that — the lender and the borrower work out an agreeable alternative to foreclosure. Upon request of the defaulting debtor, the lender may be willing to reasonably accommodate the debtor. This accommodation can take many forms including, but not limited to, temporarily suspending mortgage payments, waiving accrued costs, fees, or penalties, or extending the loan’s repayment period.

In our Law 101 posts, we define terms, phrases, or concepts with the goal of conveying core information in order to set the stage for more complex discussions.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s