Wednesday, July 28, 2010

Be Careful! Fraudulent Foreclosure "Help" on the Rise

The fastest-growing consumer complaint in 2009 was related to fraudulent offers to help "save" homes from foreclosure, according to a report released yesterday from the Consumer Federation of America.

The Consumer Federation of America, the National Association of Consumer Agency Administrators and the North American Consumer Protection Investigators have released  their 15th report (The 2009 Consumer Complaint Survey Report) regarding consumer complaints. The results in the report come from a survey of 33 state, county, and city agencies from 18 states on the most common consumer complaints received from January 2009 through December 2009.

According to the report, consumer complaints are on the rise, and more than half the agencies reported that they received more complaints in 2009 than in 2008. In addition, many of the complaints, like those about bogus foreclosure offerings, were related to the economy. Others included complaints about aggressive collection practices, debt settlement and other types of debt relief services, landlord and tenant problems resulting from foreclosures and job scams.

The report includes egregious examples of some of these foreclosure rescue scams and what actions many States Attorney Generals' offices are taking to combat them. 

In Minnesota... there is a coalition of over 70 organizations, agencies and companies that have come togother to fight these scams.  "Look Before You Leap" a statewide public education campaign seeking to raise public awareness about the booming foreclosure rescue scam industry and its dangerous implications for struggling and unsuspecting home owners, and to connect struggling home owners with the Center’s network of foreclosure counselors.

If you're not familiar with the campaign... you can learn more on our Facebook Page and our website.

If you, or someone you know is struggling with mortgage payments...  BE CAREFUL and don't wait until it's too late. To find your local non-profit, FREE Foreclosure Counselor, click here. For additional information about preventing foreclosure in Minnesota, click here.

Monday, July 12, 2010

Unemployed? Foreclosure Options

The Home Affordable Unemployment Program (UP) went into effect (for non-GSE mortgages) on the first of July. The UP forbearance plan allows servicers to reduce or suspend a borrower’s payment while they are receiving unemployment benefits. Servicers are required to offer an UP forbearance plan to borrowers who meet the basic HAMP eligibility guidelines and have not previously received a modification through HAMP.
Unemployed borrowers must:
  • Make the request for UP forbearance before the mortgage is seriously delinquent (before 90 days delinquent)
  • Be unemployed at the date of the request, and be able to documents that he or she will receive unemployment benefits in the month of the "Forbearance Period Effective Date"
Servicers have some leeway pursuant to investor guidelines to require a borrower to receive unemployment benefits for up to three months before the forbearance period will begin, however the homeowner can make the request as soon as they become unemployed and are able to document he or she will receive benefits.

Unemployed borrowers who do not meet the UP forbearance criteria may be offered other forbearance programs. If not offered another forbearance plan, the borrower must be evaluated for HAMP. The HAMP evaluation will not include unemployment or severance payments in the calculation of gross income.

In addition, a borrower who was denied HAMP in the past may request UP if they meet all the eligibility requirements.

The UP forbearance period lasts a minimum of three months or until the borrower has become re-employed. It is up to the servicer’s discretion as to extending the forbearance period beyond three months. During the forbearance period the borrower’s payment will be reduced to 31% or less of the gross monthly income. The servicer has the option to suspend the payments in full, again at their discretion and according to investor guidelines. Any payments due during the forbearance period must be paid in the month due or the plan may be cancelled and the borrower will not be eligible for HAMP.

For additional details on UP, you can visit the Supplemental Directives page from available on the Making Home Affordable administrative website here

If you're currently unemployed and receiving (or will receive) benefits... and would like to learn more about this program, contact a FREE non-profit Housing Counselor as soon as possible.  In Minnesota, you can find your local Counselor, here.