It’s important to remember that the terms of a contract are the terms of the contract, but they may also determine how you’ll be treated once you’re a homeowner. One of the most common contract issues for newer homeowners is the issue of the “contract retention” clause. This is an area I cover in my course at homebuyer.com.
This clause refers to the period of time after a homeowner buys a home that they are permitted to remain in possession of the house after the purchase, and for as long as they retain possession of the house. Most homeowners in this situation are simply permitted to remain in possession of the house as long as they pay the mortgage. They are not permitted to return the house to the seller unless the seller agrees to the retaining clause.
Contract Retention is the only way to keep a homeowner from having to pay the mortgage for the rest of their life. It is a term that can vary from state to state, but most states that have contract retention clauses in them require the homeowner to remain in possession of the house for a fixed period of time after the home is purchased.
Contract retention clauses can be very common in the state of Florida. In fact, in Florida, contract retention is the primary means of keeping a home owner from having to pay their mortgage for an extended period after the home is purchased. It is because contract retention clauses are so common that they are legally required in some states to be included in the contract.
Contract retention clauses are a form of property insurance that protect the homeowner from having to pay their mortgage for a period of time after the home is purchased. They were once common as a way for homeowners to avoid having to pay their mortgage for an extended period due to the possibility of being evicted after the property was purchased.
Contract retention clauses do indeed appear in the contracts for sale contracts, but as it turns out, it is not typically included in the contracts for sale because it is an unusual, “exotic” subject best left to lawyers. If it was included in the contracts for sale, the seller would be able to take advantage of that clause and claim they never intended for the homeowner to be liable for their mortgage payments, even when they did not buy the property.
Contract retention clauses can be both good and bad. In the rare case that they can be used to avoid the homeowner’s liability for mortgage payments, they are a way for lenders to make it harder for the homeowner to get out of the contract. More commonly, they are used to avoid the homeowner’s liability for repairs due to the homeowner neglecting or refusing to pay for maintenance or repairs.
This is probably the kind of thing that is going to happen to the majority of homeowners if they don’t get out of the mortgage contract early. Most homeowners realize that the homeowner cannot afford to pay their mortgage. They may have taken out a loan, but may not have been able to pay it back quickly enough. Also, many homeowners have used the loan as an opportunity to buy a home in a desirable neighborhood, but have not paid back the loan.
The reason is that there is a certain amount of “hold” that is built into the contract. This means that if the homeowner does not pay their mortgage, the lender can put a lien on the property for the remaining balance. In most states, a lien for a homeowner’s past due debt can be put on their home – effectively making the home “worthless”. As a result, many homeowners will end up in foreclosure.
This isn’t just a problem for homeowners who have to deal with foreclosure. The banks can legally put a lien on your house and force you to pay up even if you don’t have a home of your own. They can also take a lien in the name of the homeowner if they are not making your payments. There’s a reason that many homeowners have a lien on their house.