What can homeowners who are behind on their mortgage payments, or who anticipate they might fall behind on their payments due to other life events, or who owe more on their house than its current value, do to try and stay in their home?
These homeowners should contact their lender immediately to discuss what options are available to them. Reluctance to do this is understandable, but the biggest mistake a homeowner can make is to avoid communicating with their lender. It is in the interest of the lender to keep a borrower in their home and communication between the lender and borrower are the best way to achieve this outcome.
Homeowners who have difficulty reaching their lender should contact local, HUD-approved housing-counseling agencies that can assist in their dealings with their lender. A list of those HUD-approved agencies that have recently received funding from Congress for foreclosure counseling appears below.
Chicanos Por La Causa
Consumer Credit Counseling Service of Northern Nevada
Financial Guidance Center
You may call the Nevada Attorney General’s HOME AGAIN hotline at 1-855-HLP4NEV for more information on HUD approved counseling agencies that can assist you.
Homeowners can also call 1-888-995-HOPE, the 24-hour Homeownership Preservation Foundation Hotline that can put homeowners in contact with counseling agencies or lenders.
In the wake of falling household income, rising unemployment rates, and abusive practices in the credit card industry, I was proud to help lead passage of the Dodd-Frank Wall Street Reform and the Consumer Protections Act, which instituted landmark reforms to reign in Wall Street. In addition, this Act created the Consumer Financial Protection Bureau (CFPB), an independent agency whose sole purpose is to empower customers to make more informed financial decisions and protect consumers from predatory financial intuitions. In this role, the CFPB promotes consumer-driven policies in the financial services industry by eliminating confusing fine print and cracking down on predatory practices.
Consumers can consult with CFPB for guidance at http://www.consumerfinance.gov/mortgagehelp/ or 1-800-569-4287 for resources to organize financials and understanding mortgage options.
I have been contacted by an organization offering foreclosure assistance. Will any organization claiming to be a housing-counseling agency be able to help me?
Homeowners should beware of and avoid dealing with organizations that claim to be housing counselors but are not HUD-certified and charge exorbitant fees. Some of these organizations might be able to help, but many have defrauded homeowners by charging large fees without providing any assistance.
Those who believe they are victims of fraud should contact an attorney. The following legal clinics might be able to provide legal assistance:
Will my credit score be affected if my home is foreclosed upon?
Credit bureaus such as Transunion, Equifax and Experian are a few of the familiar agencies that assess a consumer’s creditworthiness. They do so by analyzing a consumer’s outstanding debt, income, and payment history and assigning a credit score.
A homeowner should expect that late mortgage payments or a foreclosure on their home will impact their credit score. Homeowners should contact a credit bureau directly to learn more about the impact of a foreclosure on their credit score.
What kind of relief for homeowners at risk of foreclosure is currently available?
Since the beginning of the housing crisis, Congress has been working to confront this enormous challenge, from supporting and extending federal foreclosure prevention programs like Hope for Homeowners (H4H) and the Obama Administration’s Making Home Affordable Program (MHA), to amending the tax code so that borrowers looking to rework their loans would avoid an additional tax, and providing billions of dollars through the Neighborhood Stabilization Program to housing counselors and local governments communities to help keep families in their homes and stabilize communities.
In February 2012, the Obama Administration, along with Attorneys General from 49 states around the nation, including Nevada’s Attorney General, Catherine Cortez Masto, announced a national settlement with the five largest mortgage servicers to acknowledge their role in the housing crisis and better help homeowners. This settlement includes $25 billion in mortgage modification incentives, including principal reduction, for struggling homeowners in need of immediate loan modifications. Homeowners should talk to the lender from whom they receive their monthly mortgage statements to determine whether they might be eligible for this program.
In addition, the Obama Administration announced revised guidelines to assist homeowners underwater in their mortgages through the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) to more effectively assist with the refinancing process.
HARP allows qualified homeowners with mortgages to refinance into loans with more favorable terms even if they owe more than the value of their homes. While some Nevadans have taken advantage of this program, too many found themselves ineligible. I fought to make the program more responsive to Nevada’s needs. In April 2013, the Federal Housing Finance Agency announced the extension of the HARP Program through December 31, 2015, and the elimination of several requirements for eligible borrowers.
For HAMP, the evaluation criteria has been modified to better account for the impact of secondary debt and the program has been expanded to include properties currently occupied by renters and vacant properties which the borrower intends to rent. The U.S. Treasury will also increase the incentives provided to lenders who reduce principal for homeowners with underwater mortgages.
RenoBruce R. Thompson
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