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loan forbearance agreement

Real Estate Marketing - Foreclosures, Loan Modifications and Government Bailout Plans - Part 3 m - Real Estate Marketing - Foreclosure rates on Forbearance Agreements done with banks reaches 58% - With Michael J ...

Deutsche Bank mortgage settlement steers away from helping distressed homeowners

Frankfurt-based Deutsche Bank backpedaled on its plan to provide loan modifications to distressed homeowners per their $7.2 billion settlement with the Department of Justice in February. Instead, the bank has been allowed to direct the consumer-relief money to making new loans, mainly to people in the areas most affected by the mortgage meltdown of a decade ago.

The settlement mandates that $4.1 billion must go to eligible consumer relief as punitive damages for their part in the subprime mortgage crisis. After two years of stating it would help existing homeowners with loan modifications, the bank announced its intention to instead apply the funds to new loans. By partnering with lenders like Nationstar, Deutsche will help low- to moderate-income homebuyers and buyers who live in distressed areas secure mortgages.

This decision, according to a report released by Michael Bresnick, independent monitor in charge of overseeing the settlement, might come as a blow to homeowners who were counting on aid from Deutsche.

Narrowly Tailored Credit Events: Proposed Changes to the Credit Derivatives Definitions and Preliminary Takeaways

Litigation and subsequent interest in the CDS market from regulators, the ISDA Credit Derivatives Steering Committee ( Steering Committee ) has proposed a change to the CDS contract intended to prevent artificial defaults (i.e., defaults that do not necessarily reflect a genuine inability of a Reference Entity to make a payment) from triggering the CDS contracts (the Proposal ).

This alert describes the proposed change and provides some preliminary takeaways.

Proposed Change

The Proposal is relatively mild in scope, in light of the wide array of potential issues and modifications considered by the Steering Committee over the past several months. The Proposal works what is essentially a subtle change to the definition of the Failure to Pay Credit Event, by adding a requirement that the relevant payment failure result from or in a deterioration in creditworthiness or financial condition of the Reference Entity. Specifically, the definition of Failure to Pay would provide that:

Loan Modifications vs. Forbearance Agreement?

Regarding Loan Modification and Michael G's answer. His answer was not a Permanent Loan Modification, he was describing a Forbearance Agreement.

Lender's will negotiation permanent loan modification, but you need to be careful.

Lender's will seldom if ever will negotiate a true loan modification. But they will offer a forbearance and new payment schedule, in a hardship for example. The caveat...all interest will be due at some later date or upon payoff.

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