Foreclosure Help for Homeowners

By now, everyone has heard about the $700 billion bailout for banks and other institutions that have gotten into trouble with bad mortgage debt. But what is being done directly for the homeowner? Here are three programs that can help North Carolina residents facing possible foreclosure:

HOPE for Homeowners Program
This federal program went into effect October 1, 2008. It offers a way to help homeowners convert subprime high interest loans into FHA fixed 30 year mortgages. But it comes with lots of qualifications, including:
- Loan must have originated before January 1, 2008
- Mortgage payment must exceed 31% of homeowner gross monthly income
- Lender must agree to reduce upside down loans to 90% of home value
- Second lender (who may get nothing) must also agree to terms
- Homeowner must share future house profits with FHA
Go to this nolo.com website for many more details. While many lenders may refuse to write down loans if they can lose a significant amount of money, in some cases it is preferable to the losses that come from foreclosure. Speak to your lender to see if a workout is available.

State Home Foreclosure Prevention Project
This North Carolina state law can help homeowners with delinquent mortgage payments. It requires your mortgage servicer to notify you and the Commissioner of Banks 45 days before starting the foreclosure process. The Commissioner's office has the authority to require a 30 day extension to the foreclosure to enable a workout between the lender and homeowner, and has a staff available to review the loan for predatory characteristics.

North Carolina Foreclosure Prevention Fund
The N.C Foreclosure Prevention Fund™ helps North Carolina homeowners who are struggling to make their mortgage payments due to job loss or temporary financial hardship. For qualified homeowners, the Fund can provide an interest-free loan of up to $36,000 to pay your mortgage and other related expenses for up to 36 months while you search or retrain for new employment. The loan can also be used to bring your mortgage current. If you are currently employed but have a second mortgage that is unaffordable because of a prior job loss or reduced income, the Fund offers an interest-free loan of up to $30,000 to pay off your second mortgage. We offer the Fund in partnership with the N.C. Housing Finance Agency using funds from the U.S. Treasury. The Fund provides assistance at no cost to you. To learn more about the N.C. Foreclosure Prevention Fund™, go to www.ncforeclosureprevention.gov

We offer this loan program through our CCCS division and serve Wake, Johnston, Durham, Orange, and Chatham counties. Come to an information session for an in-depth explanation of the program - all sessions are held on Thursday mornings from 10 am to 11:30 am.

Triangle Family Services is HUD-approved and is on the list of agencies certified to help with each of these programs. Make an appointment at 919-821-1770 to speak to a certified housing counselor about all options available to homeowners in trouble.

New Foreclosure Prevention Program

With funding from the North Carolina Housing Finance Agency, Triangle Family Services is now administering a new program to help workers experiencing a job loss save their home from foreclosure.

If you:

• Live or work in Wake, Johnston, Durham, Orange, or Chatham County
• Have lost your job or may lose it due to changing economic conditions
• Had made your mortgage payments on time while working
• Are now delinquent on your mortgage or are in danger of becoming delinquent

You may be eligible for:

• Up to $24,000 in loan assistance
• Loan is deferred for 15 years and has no interest
• Loan can be used to bring mortgage current
• Loan can be used to make payments for up to 9 months while looking for work
• Loan can be used to make payments for up to 18 months while in school or in a retraining program
• You must meet eligibility requirements to submit an application
• While waiting for application approval, lender cannot foreclose on your home

If you believe you are eligible for this program and could benefit from it, give us a call at (919) 821-1770 or (800) 283-6904. We'll schedule you to see a housing counselor who will review your entire situation and look for ways to get you back on firm financial footing. If you meet the screening criteria, you'll be referred to an agency loan officer who will help you complete the application process.

Governor Signs New Foreclosure Reduction Bill

Governor Easley signed into law on August 18, 2008 several bills that can help homeowners with subprime loans stay in their homes, and prevent future abuses in the mortgage lending industry. Here are the details of those new laws:

“Emergency Foreclosure Reduction Program” (HB 2623)
For homeowners with high interest loans originated between Jan 1, 2005 and Dec 31, 2007, mortgage lenders must give to the homeowner and the NC Commissioner of Banks 45 days notice before beginning any foreclosure procedures. The Commissioner’s office will work with the homeowner and lender to try to arrive at a new interest rate loan that is acceptable to both parties. The Commissioner has the authority to provide a 30 day extension to the foreclosure date to facilitate a workout. The law goes into effect Nov 1, 2008.

Regulation of Mortgage Servicers (HB 2463)
This bill provides stronger safeguards in North Carolina against loan servicing abuses. It requires that individuals and companies that service mortgage loans must register with and report to the Commissioner of Banks. The law goes into effect in its entirety on Jan 1, 2009.

Elimination of Yield Spread Premiums (HB 2188)
This bill eliminates kickbacks that certain mortgage brokers had received for steering customers into high interest loans. These kickbacks are noted as YSP (for Yield Spread Premiums) on the HUD-1 settlement statement all homeowners must receive at closing. The law goes into effect on Oct 1, 2008.

If you have any questions about your specific loan or whether there are any programs available to help you avoid foreclosure, we are a HUD-approved housing counseling agency and may be able to help. Call us at (919) 821-1770 to make an appointment.