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Hello champions in real estate,聽聽
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our topic for today is to know the聽
difference between Delinquent and Default,聽聽
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Forfeiture and Foreclosure, Loan restructure聽
and Redemption. What are their differences?
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What is the difference between delinquent聽
and default? well this is the difference:聽聽
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delinquent is just late or undesirable payment聽
of obligation whereas default is the failure聽聽
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to fulfill a duty or promise to discharge an聽
obligation. Delinquent is normally less than聽聽
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three months, default is normally three聽
months consecutive non-payment of installment.聽聽
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Default can lead to cancellation of contract聽
and the taking back of the property by the聽聽
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seller or developer. What is the difference聽
between Forfeiture and Foreclosure? Foreclosure聽聽
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is the taking back of the property as聽
penalty and cancellation of contract due聽聽
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to breach of obligation. This is the right of聽
a developer whose name in the title is still聽聽
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in its name. It will just cancel the聽
contract, forfeit and take back the property.聽聽
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While foreclosure is a legal proceeding聽
that bars or extinguishes a mortgagor's聽聽
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right to redeem a mortgage property. Since the聽
title is normally in the name of the buyer,聽聽
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as in the case of a bank loan, Foreclosure is the聽
right process because buyers are given one year to聽聽
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redeem the property but if the buyer cannot redeem聽
by paying in full, the property is foreclosed.
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What is loan restructure, Loan restructure is聽聽
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to change or modify the contracted聽
financing scheme for a certain purpose.
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This could be due to changes in the finances of聽
the buyer over time. If substantial payment has聽聽
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been made and he's a good payor loan restructure聽
is allowed upon the request of the buyer聽聽
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while redemption is the right to redeem聽
the property during the foreclosure period.聽聽
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Redemption means the buyer聽
has one year to pay in full聽聽
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before the lending institution can聽
finally foreclose the property.聽聽
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Many distressed buyers use this one-year聽
redemption period to sell the property.
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That's the usual case.
