In the mean time, check out our refinance rates!
What does the term 1-4 Family Rider means?
As far as I know, a 1-4 Family Rider usually means that it is a multi-unit property. The concerned property should have more than 1 unit. For example duplex, tri-plex, or four-plex will be marked with 1-4 Family Rider. This can be written as 2-4 Unit Family Rider or 1-4 Family Rider.
i am going through a proposed modification for a rental house that I am 6 months behind on, Ocwen wants me to sign a 1-4 rider that says they will take the rents paid. they are willing to lower the payments, but I would have to give them the rent. is this right? can they do that? do I have to sign the rider?
It looks like your mortgage lenders wants to make a deal with you whereby you'll assign the rent to them and in exchange, they'll lower your mortgage payments. However, they can do that only if you want allow them to do so. They cannot force you to accept any such deal. You must consider your situation. If the reduction in the monthly payment is considerable and it can help you save some amount of money, you can assign the rents to them. But before taking such a decision, you must know in details about the modification program like, how lower the payments would be, if the modification would be permanent, etc.
1-4 Rider is a document that attaches to the Deed of Trust and allows the lender to collect rents on the property in the case of default (if you moved out and moved tenants in, they will go to the tenant and have rent paid to them instead of you). It also makes fixtures of the property part of the security agreement (water heaters etc), usually deletes the requirement to occupy the property unless otherwise agreed in writing, and prohibits the placing of additional subordinate liens on the property (second or third mortgages etc)