NFH Foreclosure Assistance
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National Faith HomeBuyers (NFH) has added loss mitigation to our list of services in an effort to assist with the increasing foreclosure crisis. We are currently assisting home owners in climbing out of the foreclosure trap—enabling homeowners to stay in their homes. NFH’s foreclosure services are free and have proven effective in helping homeowners retain their homes. National Faith’s Foreclosure Prevention Specialists will assess your financial situation, determine what options are available to you, and help you negotiate with your lender. Our specialist are familiar with the various programs and arrangements that lenders are offering, and will assist you in determining what the best course of action is for you and your family. In addition, our counselors will contact the lender on your behalf to discuss your situation, and in most cases will assist you in negotiating new payment options. NFH will also help you establish a new monthly budget so that you can better understand your cost of living. NFH maintains information on services, resources, and programs available that may provide you with additional financial, legal, medical or other assistance that you may require. NFH is HUD, MSHDA and Freddie Mac certified.
There are alternatives to foreclosure that your lender may be willing to work out with you in order to help save your home, or at least prevent foreclosure from ruining your credit. A few of the alternatives include;
Repayment Plan—Your lender may give you a fixed amount of time to repay the amount that you are behind, plus any applicable service and/or late fees, by adding a portion to your regular monthly payment. This option is good if you have only missed a few payments.
Forbearance—Your lender may agree to suspend your payments for a set amount of time. At the end of your arrangements you will resume making your regular monthly payments, and you will either make one lump sum payment or additional partial payments. This option is good if you are experiencing a temporary reduction in income.
Loan Modification—Your lender can agree to decrease your interest rate, lengthen the term of your loan, or attach missed payments to the loan balance.
Sell Your Home—In a “short sale,” your lender will agree to let you sell your home, and will forgive any shortage between the sale price and the mortgage balance. It is possible that there could be additional tax liabilities on the amount of debt forgiven.
Deed in Lieu of Foreclosure—This alternative allows you to transfer the title to your lender in exchange for cancellation of the remainder of your debt. In using this option you will lose any equity in the home, and it’s possible that you will have to pay taxes on the debt forgiven. A sale, or deed in lieu of foreclosure, may be a better alternative than a having a foreclosure negatively affecting your credit.
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| Predatory lending is the practice of using unfair, deceptive, and abusive tactics in lending money. Unscrupulous lenders in the mortgage and consumer lending industries take advantage of borrowers who are less knowledgeable about lending practices, getting them to agree to loan terms that are not only less than desirable, but also financially damaging. Predatory lenders also target borrowers who are so desperate to obtain loans that they will agree to nearly anything.
“Possible Warning Signs of a Predatory Loan”
It sounds too easy: "Guaranteed approval" or "no income verification" sometimes indicate that the lender doesn't care whether you can afford to make the payments over the long haul.
Excessive fees: Make sure fees are typical of those 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 are negotiable. It is common for home buyers to pay only one percent of the loan amount for prime loans. By contrast, a typical predatory loan may cost five percent or more.
Large future costs: High-risk adjustable rate mortgages with payments that rise substantially after a short introductory period are seldom appropriate for families who already have had problems repaying other loans. Home buyers should also avoid a large, single "balloon" payment (a lump sum due at the end of the loan's term).
Closing delays: A lender who deliberately delays the closing may be waiting for the commitment on a reasonably-priced loan to expire.
Over-valued property: Inflated appraisals can allow for excessive fees to be included in the loan, resulting in the borrower owing more to the bank than the home is worth.
Barriers to refinancing: Prepayment penalties can make it hard for borrowers to refinance and take advantage of a lower-cost loans.
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: An ethical lender or broker will always require you to sign key loan papers, and they will never ask you to sign a document dated before the date you sign it. Nearly all predatory lending occurs in the "subprime market," where loans are sold to people with less than ideal credit histories. Subprime loans have played an important role in helping millions of consumers achieve homeownership, but, unfortunately, some lenders abuse their role and take unfair advantage of vulnerable borrowers. Here are some common problems with predatory loans:
High interest rates and fees: Predatory lenders often charge extremely high interest and fees that are added into the total amount of the loan the borrower must repay. These lenders charge what they can get away with, not a fair amount based on the credit history of the borrower.
Broken promises & bait and switch: Sometimes home buyers are offered a new loan or a refinance of an existing loan that seems to meet all of their needs--only to find that interest rates and fees have changed when they get to the closing table. Agreeing to last-minute changes can cost thousands of dollars and result in a loan they just can't afford.
Loans that start low and go high: Adjustable rate loans are popular in today's market, but many that seem affordable are likely to have steep cost increases in the future. Avoid "payment shock" by considering whether you can pay for the loan both now and in the future.
Loan "flipping": Too many homeowners are persuaded to refinance their mortgage, sometimes repeatedly, when there is no real benefit. Even when a family receives some cash from a refinance, the gains should be weighed against the costs of excessive fees and a higher loan amount.
Steering: Some families who receive subprime loans could qualify for a much more affordable home loan. Predatory lenders use aggressive sales tactics to steer families into unnecessarily expensive loan products.
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For More Information On Our Foreclosure Programs and Projects,
Please Contact Us At
National Faith HomeBuyers - Foreclosure
601 W. Fort Street, Suite 440
Detroit, MI 48226
Office - (313) 255-9500 Fax - (313) 255-9555
Email - foreclosure@nationalfaith.org
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Beware of Scams!
Homeowners desperately trying to avoid foreclosure are targets of common scams:
1. A “foreclosure prevention specialist”—These scams involve someone taking large fees up front to negotiate with your lender and “save your home.” There is no need to pay someone to speak to your lender on your behalf – most lenders will work with you directly to help you save your home.
2. The lease/buy back—Homeowners are tricked into signing over the deed to their home based on promises that they will be able to remain in the home as a renter and buy the home back later. Generally, the terms of the lease are so difficult that homeowners are rarely, if ever, able to repurchase their homes.
3. Bait and switch—Homeowners are tricked into signing over the deed to their homes because scammers convince them they are only entering into a new mortgage agreement. Read everything carefully, before you sign!
For More Information, Help Filing Complaints
and/or Free Legal Assistance
For more information on mortgages and foreclosure, helpful websites include:
www.michigan.gov/mshda,
www.ftc.gov/credit,
ww.hud.gov/foreclosure/index.cfm
National Faith HomeBuyers is happy to assist you in filing a Foreclosure Scam Complaint or complaints regarding a licensed mortgage brokers and/or lenders.
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1. What is the difference between a lender and a servicer?
A lender provides the funds for your mortgage. A servicer collects mortgage payments, and may not be the same as your lender.
2. What is foreclosure?
Foreclosure is a legal process that creditors can use in order to satisfy your financial obligation to them. Foreclosure generally results from non-payment of a debt (including mortgages, second mortgages, and home equity lines of credit) but can also result due to non-payment of property taxes.
3. If I miss one mortgage payment, am I at risk of losing my home?
The short answer is yes, you are in danger of losing your home to foreclosure. Technically, after one missed payment on your mortgage, you are in breach of your agreement with your mortgage lender. Although most lenders do not initiate foreclosure proceedings after only one missed mortgage payment, do NOT mistake this for “getting away” with missing a payment. Late charges and other fees may apply if you miss a payment, and this adds up, which will make it harder for you to make up missed payments later.
4. My lender has initiated foreclosure proceedings. What do I do?
Immediately contact an attorney and/or a non-profit housing counseling agency. If you need legal help but cannot afford an attorney, you may contact legal-aid at: www.michbar.org/public_resources/legalaid.cfm. For federally approved housing counseling agencies, call HUD at 800-569-4287 or visit www.hud.gov. For state approved housing counseling agencies, contact MSHDA at 866-946-7432 or visit www.michigan.gov/mshda.
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