I have heard that, even if a borrower remains current on his payments, the lender can require immediate payment if the market value of the house drops below the remaining principal on the loan. Is this, or something like it, true?
2007-03-14 05:49:22 · 5 answers · asked by Mark H 3 in Business & Finance ➔ Renting & Real Estate
NO.
That is a standard clause on commercial mortgages, like for large apartment and office buildings, etc... If the value drops and pushes their loan-to-value higher than what they lent at, they can require you to pay the balance down immediately.
But I have NEVER seen a clause like that on a residential mortgage. Not even with the worst subprime companies. And Fannie Mae, Freddie Mac, FHA & VA, none of them have that clause.
2007-03-14 05:54:37 · answer #1 · answered by Yanswersmonitorsarenazis 5 · 1⤊ 0⤋
No, a lender can't foreclose if you are making the agreed payments on the contract. You are responsible for the debt not the lender. If you were to sell the property you would have to be able to pay the entire balance of the loan to sell the property with a clean title.
2007-03-14 05:55:18 · answer #2 · answered by dancing11freak 2 · 0⤊ 0⤋
No.
As long as you make payments on time, they can not force a sale of a home.
ADVICE: Do not be late with ANY payment as that draws attention to the account. If your LTV is too high, drawing attention to the account is the last thing you want to do. You may want to round up the payment to the next $100 so you can reduce the LTV ratio quicker.
2007-03-14 07:15:31 · answer #3 · answered by forgivebutdonotforget911 6 · 0⤊ 0⤋
This is not true. However if the Lender can prove that you are intentionally destroying the property they can demand immediate payment.
2007-03-14 05:58:54 · answer #4 · answered by Ron H 2 · 0⤊ 0⤋
Try visiting this website I found, you can submit any question directly to a local independent mortgage advisor with no strings attached: http://www.moneymuscle.co.uk
2007-03-14 05:56:29 · answer #5 · answered by becky m 1 · 0⤊ 0⤋