- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Assignment Of Rents
An assignment of rents is a contract term, or collateral, required by lenders as part of a mortgage agreement that allows the lender to collect rentals from tenants directly for repayment of the mortgage debt should the borrower default on it.
As the foreclosure is a long tiring and costly process, an assignment of rents gives a lender an alternative to foreclosure when an income generating property has enough cash flow to fully or significantly meet the required monthly payments.
However, executing is can also be a challenge.
Lenders would have to inform tenants in a timely manner about changes in payment information, might have to set up new accounts, and face the common problems with rental collection.
If lenders are willing to go to such extents to collect payments, then it should give you an idea how much they loathe cases of foreclosure.
When the original borrower is able to meet the payments himself, then he has to request for reinstatement of the original payment arrangements, ,subject to the lender’s approval.