Foreclosure Rescue Scams Are Out There – BEWARE!
Washington, as well as other areas, have a growing problem of foreclosure rescue and mortgage modification scams that could cost you thousands of dollars OR your home should you fall victim. Scammers will usually make promises they can’t keep such as ensuring GUARANTEES of certain outcomes for a fee and/or pretending they have direct contact with your mortgage servicer.
If you think you may be a victim of one of these kinds of scams, file a complaint NOW.
To help you avoid such scams follow these tips:
If you see/hear promises to save your home and lower your mortgage or debt payment, beware of con artists. If you are struggling to pay your mortgage, keep these tips in mind:
On your own or with help from a HUD-approved housing counseling agency, you can apply to the federal Making Home Affordable (MHA) program. For more information call 888-995-HOPE.
ONLY your mortgage servicer can grant a loan modification. This is how you know it’s impossible for a third party to guarantee or pre-approve your HAMP mortgage modification application.
If they want you to pay a fee upfront, beware. In most cases, charging fees in advance of a mortgage modification is actually illegal. Paying a third party won’t improve your likelihood of receiving a mortgage modification anyway.
If an individual or company claims to be affiliated with HAMP or has a logo or some display representing themselves as such, check out the said connection by calling the Homeowner’s HOPE Hotline at 888-995-HOPE.
Also, be leery of anyone that offers money-back guarantees.
ESPECIALLY beware of anyone who advises you to discontinue contact with your mortgage servicer or to stop making mortgage payments.
Never sign over the deed to your property to any individual or organization unless you are working directly with your mortgage company to forgive your debt.
With the New Year Comes New Federal Laws Protecting Home Owners
Just after 2014 barely arrived, with it a number of new federal rules in the mortgage and foreclosure context did too. The Dodd-Frank Wall Street Reform and Consumer Protection Act are responsible for the changes taking effect. The Dodd-Frank Act provided authority to the Consumer Financial Protection Bureau to issue rules to implement the changes. Take a look at this sampling of the many changes:
Dual Tracking is Done
Mortgage lenders and services have been practicing dual tracking a lot in recent years. Dual tracking is where a bank considers a homeowner’s application for a loan modification while simultaneously going through with a foreclosure on their home. Federal law now prohibits this.
ATR (ability to pay) are standards that a loan applicant must meet to show their ability to repay a loan. Through much of the 2000s, loans were being granted left and right without numbers being run to see if applicants could actually afford them. Mortgage rates would often increase or balloon payments came to low rate loans after a few years inevitably causing home owners to default on their loan and lose their home through foreclosure. As of January 10, The CFPB has implemented rules requiring mortgage lenders to adhere to ATR requirements.
New Protections For High Cost Mortgages
Protection is provided to borrowers of loans with high interest rates or fees. The Dodd-Frank Act expanded these protections set by the Home Ownership and Equity Protection Act. For details, see here.
Other Requirements for Mortgage Servicers
The CFPB put a whole bunch more rules into action protecting mortgage holders, those shopping for mortgages, and those staring at the face of foreclosure. The rules require mortgage servicers to do the following:
-provide monthly billing statements to borrowers
-notify borrowers of adjustable rate loans when the interest rate changes
-credit mortgage payments promptly
-provide alternatives to force placed insurance
-quickly resolve mistakes and quickly respond to requests of borrowers, and
-contact borrowers who fall behind in their payments.
Guest Blog post by Edmonds Criminal Attorney Ryder Law Office.
Bankruptcy Filings are Dropping Across the Nation
Bankruptcies, both of personal and business nature, continued to steadily drop throughout 2013 across the nation. This is both shocking and interesting as bankruptcies were actually predicted to rise by at least 8% in 2013. Business bankruptcies in particular, actually dropped 24%. This is the lowest they’ve been since 2006 and this trend is expected to continue through this new year of 2014.
2012 filings showed double digit reductions in many states across the nation. Arizona alone reported a 19% decrease. Hawaii saw an 18% decrease. This trend does seem to be domestic which is pretty interesting. As our state’s bankruptcy filings fall, those of places such as Belgium saw a 9.4% increase and The Republic of Cyprus almost entirely filed for bankruptcy as a whole in March of 2013 before they asked for help and therefore managed to stay financially afloat.
Obviously most people try to avoid bankruptcy as it has a negative stigma and can be costly. This fact coupled with the increased availability of consumer credit markets means the option for people to borrow rather than file for bankruptcy becomes more favorable and will consequently continue the downward trend in filing for bankruptcy.
Should you choose to file for bankruptcy in 2014, Advantage Legal Group is here to help. For more information on bankruptcy, check out these blogs: