HUD Extends Application Period for EHLP

On Tuesday, the US Department of Housing and Urban Development (HUD) and NeighborWorks America announced that they have reopened the application process for the Emergency Homeowners’ Loan Program (EHLP).


EHLP offers an ‘emergency bridge loan’ (mortgage payment assistance) of up to $50,000 for qualified homeowners who have experienced an involuntary reduction in income (due to medical or employment issues) and are at risk of foreclosure.


Several thousand EHLP pre-applications were received during the original enrollment period in July.  The majority of those did not meet the strict guidelines established by HUD and the Dodd-Frank Act.   Because of the high disqualification rate, HUD anticipates that there will be funding available to reach additional struggling homeowners, and has decided give additional homeowners the opportunity to apply for these funds during an “Open Enrollment” period.


However, homeowners need to understand two key points about this new open enrollment period:

1. The strict qualifying guidelines still apply
2. Open enrollment requires a COMPLETE application and supporting documentation

The strict guidelines include (but certainly aren’t limited to):

• 90 days late as of June 1, 2011 and homeowners must still be at least 90 days late 
• Must have experienced a documentable reduction of 15% in their income due to the economy or a medical condition (involuntary layoff or wage reduction, for example)
• No sheriff’s sale scheduled within the next 30 days 

EHLP funds are provided to qualified homeowners on a first-come, first-served basis and it is critical homeowners provide all required application documents as quickly as possible, or they may risk losing the opportunity to apply for assistance.  In Minnesota homeowners should submit all documents before 4:00pm on Thursday, September 15th and understand that as the September 15th deadline nears, there may not be enough time to review application documents.  Submission of documentation does NOT guarantee that an application will be reviewed or accepted by HUD.


What should interested homeowners do?
Homeowners that are interested in applying for EHLP during the open enrollment period should contact their local Housing Counseling agency that is participating in open enrollment to see if they meet the strict program requirements and for information on how to apply.

• Hennepin County residents, call Community Action Partnership of Suburban Hennepin at (952) 933-1993.
• Carver, Scott & Washington County residents, call Carver County CDA at (952) 658-7878.
• Dakota County Residents, Call Dakota County CDA at (651) 675-4555.
• Residents of ALL OTHER MINNESOTA Counties, call LSS Financial Counseling at (800) 777-7419.

Additional information about EHLP and the strict eligibility requirements are also available on the EHLP Minnesota website:  www.EHLPMinnesota.com.  

Foreclosure Moratorium in Minnesota?

Disaster Areas in Minnesota Affected

On Tuesday May 11th, the Federal Government announced that federal disaster aid had been made available to Minnesota to assist with the state and local recovery areas from the spring storms and flooding that started back in mid-March and continues through today. While this means that Federal funding is available to state and local governments to help with protection and recovery efforts, there is also a housing-related issue that this National Disaster declaration puts into place: a 90 day moratorium on any foreclosure action on any FHA backed loans for consumers affected by the storms/flooding. (Fannie Mae and Freddie Mac and a handful of private lenders/servicers also have standing policies about halting foreclosures in Disaster Areas.)

The counties affected by the National Disaster declaration are: Big Stone, Blue Earth, Brown, Carver, Chippewa, Clay, Grant, Lac qui Parle, Le Sueur, Lyon, McLeod, Nicollet, Redwood, Renville, Scott, Sibley, Stevens, Traverse, Wilkin, and Yellow Medicine counties.

Remember, the moratorium and other tools that HUD has put in place for lenders (mortgagees) to use are only available to homeowners that have been DIRECTLY affected by the disaster.

In a clarification conversation the MN Home Ownership Center had with local HUD representatives in Minnesota, the word AFFECTED can mean:

• Either the property itself was damaged or destroyed by the storms/flooding,

or

• The homeowner’s income was affected by the flooding (their place of work or business is flooded, for example)

Affected homeowners who have an FHA-backed mortgage are instructed to call their lender to see what tools FHA has in place for helping with foreclosure avoidance following the disaster declaration.

In addition, the Homeownership Advisors Network is ready to assist ANY homeowner that is struggling with mortgage payments, especially those homeowners that have been affected by the spring storms.

Don’t delay, contact a foreclosure counselor that is a member of the Homeownership Advisors Network TODAY to see if there’s help available for YOU to avoid foreclosure. Even if you’re not yet behind, now is the time to call. To find your local foreclosure counselor, click here.

$600k For Housing Counseling

Homeownership Advisor Network Members Receive almost $600k in HUD Grants

The Minnesota Home Ownership congratulates members of the Homeownership Advisors Network who have received over $638k in funding from the U.S. Department of Housing and Urban Development (HUD). These funds will support the delivery of a wide variety of housing counseling services to help individuals and families in Minnesota improve their access to affordable housing, expand their homeownership opportunities, and avoid foreclosure and foreclosure rescue scams.

HUD Secretary Shaun Donovan stated, “Now, more than ever, it’s crucial that we support these agencies that are working with struggling families on a one-to-one basis to manage their money, navigate the home-buying process, and secure their financial futures.”

In Minnesota, the distribution of these funds will support:

ANOKA COUNTY COMMUNITY ACTION PROGRAM, INC (Blaine), $37,949.74
ARROWHEAD ECONOMIC OPPORTUNITY AGENCY, INC. (Virginia), $41,391.11
CARVER COUNTY COMMNITY DEVELOPMENT AGENCY (Chaska), $39,916.24
COMMUNITY ACTION DULUTH, $41,882.73
DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY (Eagan), $61,882.73
LUTHERAN SOCIAL SERVICES/ CCCS OF DULUTH, $110,899.48
REVERSE MORTGAGE COUNSELORS, INC (St. Paul), $35,983.25
SAINT PAUL DEPARTMENT OF PLANNING AND ECONOMIC DEVELOPMENT, $89,832.47
TRI-COUNTY ACTION PROGRAM, INC. (Waite Park), $35,000.00
TWIN CITIES HABITAT FOR HUMANITY (Minneapolis), $35,500.00
WASHINGTON COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (St. Paul Park), $62,865.98


Over $150k of the grant awards listed above were granted as Mortgage Modification and Mortgage Scams Assistance dollars that will be used by organizations to provide homeowners information about fair lending abuses and mortgage ‘rescue’ scams. Ed Nelson, spokesman for the Minnesota Home Ownership Center stated, “These funds will go a long way to helping the counseling agencies spread the word about dangerous, and costly, foreclosure rescue scams in Minnesota.”

The Homeownership Advisors Network is the State of Minnesota’s premier network of housing counseling agencies and is supported by the Minnesota Home Ownership Center. Members of the Homeownership Advisors Network are highly trained, certified professionals that provide advice and guidance for Minnesota families as they struggle to find and maintain stable housing.

For more information about the Homeownership Advisors Network or the statewide media campaign known as “Look Before You Leap” that continues to warn Minnesota homeowners to be on the lookout for foreclosure rescue scams, visit the Minnesota Home Ownership Center’s website at www.hocmn.org

In addition to the funds listed above granted to members of the Homeownership Advisors Network, other organizations in MN also received HUD grants:

CATHOLIC CHARITIES DIOCESE OF ST. CLOUD, $44,340.85
SOUTHERN MINNESOTA REGIONAL LEGAL SERVICES, INC. (St. Paul) 45,324
HOUSING PRESERVATION FOUNDATION (Supports National Network) $2.4mm

Census Bureau Releases Housing Data

This is actually a couple of days old... but I thought our readers might be interested in knowing that the U.S. Census Bureau has released the 2009 American Housing Survey, The Report covers statistics about apartments, single-family homes, manufactured housing, new construction and vacant housing units throughout the country.

According to the new survey... the nation's homeowners paid a median of $1,000 in monthly housing costs in 2009, compared with $808 for renters. However, renters usually paid a higher percentage of their household income on these costs than did owners (31 percent compared with 20 percent).

A wide range of specific topics is covered in the survey, such as the presence of air conditioning, crowding, housing costs, special living services offered to older residents, type of heating fuel used, cost of utilities and size of the home... and even 'subjective' information like satisfaction with the neighborhood. Of course, the survey also covers the demographic characteristics of the housing units' occupants.

Here are some interesting facts from the report:

• Thirty-two percent of owner-occupied units were owned free and clear,
• 66 percent had a regular and/or home equity mortgage and 2 percent had only a line-of-credit.
• The most important consideration for recent movers in choosing their homes was financial (28 percent), followed by room layout/design (15 percent) and size of home (10 percent). Furthermore, the most common reasons recent movers had for choosing their neighborhoods were convenience to job (20 percent), convenience to friends or relatives (14 percent), look/design of neighborhood (10 percent) and the house itself (10 percent).
• Ten percent of communities had secured entrances, with the likelihood somewhat higher (15 percent) in new communities. [Ed... Really? 10% of all single-family homes are in gated communities??]

Data from this survey (In MS Excel format) are available at the national and regional level, and for inside and outside metropolitan statistical areas, and urban and rural areas.

Remember... The Minnesota Homeownership Center’s goal is SUCCESSFUL homeownership. If you’re thinking of buying your first home… the Center is here to help. Workshops for first-time buyers are available throughout the state and counselors (one-on-one meetings) are also available. If you’d like to learn more, visit our website here.

Deadline Today For SAFE Act Comments

The deadline to submit comments on the proposed Secure and Fair Enforcement for Mortgage Licensing Act  (SAFE Act) is TODAY, Friday March 5th, 2010

The federal and proposed state legislation define foreclosure counselors, including those in the Center’s network, as loan originators.

Including foreclosure counselors in the legislation will necessitate extreme costs, irrelevant education, and unreasonable redundancies, all of which could jeopardize the existence of free, unbiased, trusted, effective foreclosure prevention counseling services at a time when they are most needed.

Foreclosure Counselors should not be subject to the SAFE Act, please consider submitting comments to HUD.

For more information... including copies of the text the Center submitted to HUD, copies of the proposed rule and comment submission instructions, please visit the Center's website here.

SAFE ACT Threatens Foreclosure Counseling

UPDATE: Comment period extended until March 5th, 2010.

The federal Secure and Fair Enforcement for Mortgage Licensing Act of 2009 (SAFE Act) compels states to adopt a uniform process of licensing and reporting for state-licensed loan originators. Its intent is to ensure that residential mortgage loan originators act in the best interest of consumers.

Based on the definitions in the legislation and the accompanying HUD Federal Register, foreclosure prevention counselors - like those in the Center's network - likely will be considered loan originators.

Including Foreclosure Counselors in the legislation will necessitate extreme costs, irrelevant education and unreasonable redundancies, all of which could jeopardize the existence of free, unbiased, trusted, effective foreclosure prevention counseling services at a time when they are most needed.

The Center recently submitted the following comments to HUD and encourages others to do so as well:

Third party loan modification specialists should NOT be covered by the licensing requirements of the SAFE Act; specifically, those housing counselors working for nonprofit and government based organizations to provide much needed foreclosure prevention assistance at no charge to consumers.

While a housing counselor may take some information from consumers to share with lenders in negotiating a loan modification, the counselor is not using that information to underwrite a loan, but rather to assist homeowners in evaluating their position and/or re-negotiating the terms of the loan with the lender. In addition, the statutes imply that the drafters' intent was to include individuals who are in a position to have some level of "adversity" vis a vis the borrower. This is clearly not the case for foreclosure prevention counselors. Furthermore, assistance with loan modifications is a relatively small part of the counselors' job. The preponderance of their time is spent on other activities: explaining the foreclosure process, review of existing mortgage documents, budget counseling, and reviewing and negotiating loss mitigation options other than loan modification. 

I urge you to exempt foreclosure prevention counselors or allow individual states the power to exempt foreclosure prevention counselors.

Please consider submitting these, or other comments to HUD as well.

All comments are due February 16th. March 5th.   Submission instructions appear in the proposed rule: http://www.hud.gov/offices/hsg/ramh/safe/safeprule.pdf

For additional information about the SAFE Act, visit the Center's website, here.

FHA Rule Change for Loss Mitigation

One of the most frequent 'concerns' that the MN Home Ownership Center receives from clients that are trying to be proactive about foreclosure avoidance - that is, they are trying to work with their lender/servicer BEFORE they fall behind in payments -  is that their lender can't work with them until they are already delinquent. 

In some instances... this was actually due to an invester policy with FHA-backed mortgages. Homeowners were not eligible for loss mitigation services until they were at least 30 days behind on payments

HUD has announced a rule change for FHA-backed mortgages, and now homeowners experiencing financial hardship who have FHA loans are now eligible for loss mitigation before they fall behind on their monthly payments. Now, loss mitigation options of forbearance and FHA-HAMP may be used when borrowers are “facing imminent default.” For more information, see HUD’s press release here.

If at all possible... homeowners should seek solutions BEFORE falling behind in payments.  If you, or someone you know is struggling with mortgage payments... 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.

Another Homeowner Scam: Fake HUD websites

As we mentioned in an earlier post here, the Center will be publishing information about the ever-increasing number of scams that are popping up in Minnesota designed to separate homeowners, or future homeowners, from their hard-earned money.

Scam #2: Fake HUD websites

The Center has learned of a number of deceptive websites that have been created that are ‘posing’ as some iteration of the HUD website. In most cases these websites include the initials 'hud' in the URL, but are also include other terms like 'bailout.hud' or 'stimulus.hud' or 'down-payment-help.hud-gov'. Many times the URL's also end in .us or .info.

All of these sites are fakes.

These websites either try to dupe people into giving out personal information (known as “phishing”) or are an underhanded link to an unscrupulous broker/lender.

Because the layout and design of these sites appear make the page appear as though they are an “official" U.S. government website, it would be easy for people may fall prey to these scams. HUD’s Inspector General’s Office and the MN Dept. of Commerce have been notified, and are investigating.

The ONLY official HUD website is: www.hud.gov and for Minnesota specific information, visit: http://www.hud.gov/local/index.cfm?state=mn

Foreclosure Rescue Scams

Over the coming weeks, the Center will be highlighting on this blog, and it's web page, a number of posts about the rising number of scams and dangerous programs that are popping up throughout the state and country looking to separate distressed homeowners from their money.

Scam #1: Foreclosure Rescue Scams (Loss Mitigation Agents/Foreclosure Consultants)

In many cases these are the same predatory loan officers and agents that sold Minnesota homeowners a dangerous or unaffordable loan in the last few years, that have rebranded themselves as being able to "help" homeowners arrange a repayment plan or a reduced monthly payment on their existing home mortgage. The 'agent' will charge anywhere from $500 to $5000 dollars or more - promising to make some kind of payment arrangement with the lender. In other cases, the salesperson is working as an agent of "attorneys that specialize in real estate law" - many times located in another state.

In either situation, there are two MAJOR problems working with these kinds of programs:

1. EVEN IF the 'agent' or 'specialist' is able to work out some kind of repayment plan with the lender... the service they offer is available FREE OF CHARGE to Minnesota homeowners through the Center's network of foreclosure counselors. In addition... the Center's network of non-profit counselors has MANY additional resources available to homeowners above and beyond what any for-profit 'agent' or attorney can offer. If our network of counselors determines that legal assistance is necesary, they have access to non-profit consumer advocate law firms that can help.
2. In MANY cases these companies take desperate homeowners money up-front and do very little to help - and actually make the situation WORSE. In most cases these companies tell consumers to STOP contacting their lender - which is always bad advise - stating that they will handle all conversations with the bank going forward. In addition, they require homeowners to sign a "Power of Attorney" which grants them 'permission' to do just about anything they want with the home. As if that weren't enough... many times these companies take the money up front, and offer NO HELP at all to homeowners, leaving them in a WORSE situation with their lender, and with even LESS money than before.

This situation is becoming so pronounced throughout the country, including Minnesota, that a number of governmental agencies have even put out warnings to distressed homeowners:

1. To view President Obama's warning about rescue scams, visit the President's "Financial Stability" page: www.financialstability.gov/makinghomeaffordable/
2. To view Attorney General Lori Swanson's warning, visit the Attorney General's website.

What are some of the warning signs of a potentially dangerous foreclosure scam?

• Calls offering you buyback or lease-to-own options
• Offers to provide "Walk-Away" services
• Requests for your social security number
• 'Counseling' that requires fees for services
• Offers for quick and easy fixes.
• Requests to sign binding contracts - including Power of Attorney - from sources other than your mortgage lender or a Center, or HUD-Approved, Foreclosure Counselor.

Home owners can avoid potential foreclosure scams by working with the Minnesota Home Ownership Center’s network of Foreclosure Counselors. The Center and our network of counselors at 24 non-profit partners throughout Minnesota are recognized by the Department of Housing and Urban development (HUD) for their high quality and dedicated service - and their help is absolutely FREE.