PainPA Posted July 20, 2009 Posted July 20, 2009 looking for commentary on a loan for a participant in a plan which allows loans for foreclosure. However the foreclosure notice is in the spouse name becuase the loan is in the spouse name. However they have the deed which lists both names. The plan sponsor is holding back allowing the loan becuase the foreclosure does not name the participant? Does the deed suffice for supporting documentation to provide a loan to prevent foreclosure?
401king Posted July 20, 2009 Posted July 20, 2009 Are you referring to a hardship distribution? If it's a loan, I don't believe there is any need to provide proof of possible foreclosure. R. Alexander
A Shot in the Dark Posted July 20, 2009 Posted July 20, 2009 You will need to review the loan provisions that are established by the plan document and the applicable written loan policy. Some plans do restrict participant loans for "hardship" or "emergency" reasons only.
PainPA Posted July 20, 2009 Author Posted July 20, 2009 The loan policy definitely states for foreclosure (hardship) but it also states it is for the benefit of the employee. The more detailed question would be... Does the deed that has both names to the home sufficient to override the foreclosure notice that only has the spouse name (Non-Participant).
BG5150 Posted July 20, 2009 Posted July 20, 2009 I would think that if this house is the princiapl residence of both him and his spouse, approving the loan would be okay. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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