Investopedia

Continue to Site »

Distressed Borrower

Filed Under » , ,
Dictionary Says

Definition of 'Distressed Borrower'

A borrower who is unable to fully repay his or her debt due to financial difficulties - difficulties either created by personal circumstance or the terms of the loan which he or she did not fully understand or was not able to meet when originally agreeing to the loan. The term "distressed borrower" is most commonly used to refer to homeowners at risk of foreclosure.
Investopedia Says

Investopedia explains 'Distressed Borrower'

Lenders have several options when working with a distressed borrower. The most common alternatives for distressed homeowners are:

- Forbearance: allowing the borrower to reduce or suspend their payments for a specified period of time and then agreeing to another option to "get current" on their current repayment amount.

- Reinstatement: allowing the borrower to pay the delinquent amount in one lump sum payment to get current on the balance amount.

- Loan modification: permanently restructuring the terms of the loan to either lower the total repayent amount required by the borrower or extend the length of time given to repay the full loan amount.

- Short sale: selling the home for less than the unpaid balance (UPB) on the loan and the lender forgives the remaining amount.

Articles Of Interest

  1.

    Homeowners, Beware These Scams!

    If you're in a pinch for money, you're the prime target for con artists and thieves.

  2. Short Sell Your Home To Avoid Foreclosure

    Are you in danger of losing your home? Protect your credit score with a real estate short sale.

  3. Avoiding Foreclosure Scams

    If you want to save your home, avoid bogus offers and take matters into your own hands.

  4. Are You Living Too Close To The Edge?

    If a missed paycheck will make your finances cave in, you must learn how to make proper supports.

  5. The Pitfalls Of Buying A Foreclosure House

    Find out if the house you're eyeing is really a good deal.

  6. Mortgage Options For Underwater Homeowners

    Find out what options are available when your mortgage is greater than the value of your home.

  7. Purchasing A Short-Sale Property

    If you are looking for a good deal and have time to wait, a short-sale house may be for you.

  8. Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.

  9. Rent-To-Own Real Estate Full Of Pitfalls

    Before you consider this type of arrangement, you should be aware of how it works, who benefits and the many things that can go wrong.

  10. Things To Know About The Home Modification Plan

    This program allows FHA borrowers to reduce monthly mortgage payments through negotiation with lenders.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center