Consumer Mortgage Information You Can Use!

The mortgage and foreclosure crisis has been heavy on my mind lately since so many of the homes I show clients are in a short sale, pre-foreclosure, or some other predicament. 

If you, or someone you know, is wonderinga bout their real estate and mortgage position, contact me at 480-390-7158 for a FREE RMA (Real Estate and Mortgage Analysis.)

This wonderful information from the National Association of Realtors is worth sharing:

WATCH OUT FOR PREDATORY LENDERS

Here are some warning signs:

• Sounds too easy. "Guaranteed approval" or "no income

verification" regardless of borrower's current employment,

credit history, and assets. These claims indicate the lender

doesn't care about whether you can afford to make the

payments over the long haul.

• Excessive fees. Higher lender and/or mortgage broker

fees than are typical in your market. Because these costs can

be financed as part of the loan, they are easy to disguise or

downplay. On competitive loans, fees may be negotiable.

It is common for home buyers to pay only 1 percent of

the loan amount for prime loans. By contrast, a typical

predatory loan may cost 5 percent or more.

• Large future costs. High-risk adjustable rate mortgages

where the payment rises a lot after the "teaser rate" period

are seldom appropriate for families who already have had

problems repaying other loans. Home buyers should avoid

large single "balloon" payments (a lump sum due at the

end of the loan's term).

• Closing delays. The lender delays closing, so your

commitment on a reasonably priced loan expires.

• Over-valued property. Inflated appraisals that allow

excessive fees to be included in the loan and result in the

borrower owing more to the bank than the home is worth.

• Barriers to refinancing. Prepayment penalties that make

it hard for a borrower to refinance in order to pay off a

high-cost loan by taking advantage of a low-cost loan.

• No down payment loans. These loans may be split into

two mortgages, with one having a much higher cost. Home

buyers should be sure they can afford the payments.

• Unethical document management. Ethical lenders and

brokers always require you to sign key loan papers, and

never ask you to sign a blank document or a document

dated before the date you sign.

ADDITIONAL RESOURCES

For immediate advice, call 888.995.HOPE to speak to a

counselor on how to avoid foreclosure. Available in English and

Spanish, 24/7. Or visit www.995hope.org for more information.

HUD Resources:

• For a list of HUD-approved counseling agencies, by state,

go to www.hud.gov/counseling.

• HUD's Internet page-"How to Avoid Foreclosure"-is

aimed at borrowers with FHA-insured mortgages, but can

help other borrowers as well. Go to www.hud.gov/foreclosure.

Freddie Mac: "Keeping Your Home, Protecting Your

Investment." Go to www.freddiemac.com and search for

this brochure by typing in the full name of the brochure.

Ginnie Mae: For a simple calculator to help homebuyers

estimate how much they can afford to spend, read "How

Much Home Can You Afford?" http://www.GinnieMae.gov.

"Looking for the Best Mortgage" is a brochure issued by

11 federal agencies on how to shop, compare, and negotiate

the best deal on a home loan.

www.federalreserve.gov/pubs/mortgage/mortb_1.htm.

Americans for Fairness in Lending: To find consumer

resources related to a variety of lending issues, go to

www.affil.org.

Consumer Handbook on Adjustable Rate Mortgages

(the "CHARM" booklet) issued by the Federal Reserve

Board (FRB) and the Office of Thrift Supervision (OTS).

http://www.FederalReserve.gov. At the FRB site, click

on "publications and education resources" and then on

"consumer information brochures."

Credit-reporting agencies:

• Equifax 800.685.1111 www.Equifax.com

• Experian 888.397.3742 www.Experian.com

• TransUnion 800.916.8800 www.TransUnion.com

Go to www.AnnualCreditReport.com to ask for a free copy

of your credit report, once a year, or call 877.322.8228.

COUNSELING RESOURCES

Non-profit organizations dedicated to helping consumers

avoid foreclosure can be invaluable.

• NeighborWorks® organizations work with the

Homeownership Preservation Foundation to support a

nationwide assistance number-888.995.HOPE. You can

speak with a counselor, day or night, to help you get back

on track financially. (English and Spanish)

• Reputable counseling agencies, such as NeighborWorks®

organizations, can help you avoid foreclosure. Look up

your nearest NeighborWorks® organization at www.nw.org.

• The U.S. Department of Housing and Urban Development

(HUD) website has a list of HUD-approved counseling

organizations, by state (www.hud.gov/counseling). We

recommend that the list be used as a starting point to

find good counselors. You also can call 800.569.4287

or TDD 800.877.8339.

• Watch out for questionable counseling companies

who advertise that, for a minimal fee, they will assist

homeowners by hiring a lawyer to defend the foreclosure

in court or negotiate lender assistance on the borrowers'

behalf. You should call a HUD-approved counseling

organization, a local NeighborWorks® organization,

or 888.995.HOPE before you pay or sign anything.