The Delaware Attorney General’s Mortgage Fraud Task Force, in conjunction with the Delaware State Housing Authority and the Office of the State Bank Commissioner, on Thursday, Oct. 8, held their second housing workshop aimed at helping homeowners stay in their homes. The workshops are also aimed at reducing foreclosures and providing information about foreclosure-related fraud.
The workshops come on the heels of three state-sponsored workshops held this summer and are in addition to workshops being held regularly by several housing counseling companies, including NCALL Research Inc. and First State Community Action Agency.
In addition to providing information on their options to homeowners who are at risk of foreclosure, who are starting to have trouble with payments or who think they might miss a payment, the workshops also are aimed to educate people about the various scams that are out there.
“The single most important thing is to let people know there is help out there with mortgages,” said Sherry Hoffman, Delaware deputy attorney general. “Call early, don’t wait.”
She said people calling their office hotline will be referred to a Housing and Urban Development (HUD)-certified housing counselor, which can be the first step toward home owners getting a loan modification. The counselors can offer help in dealing with the loan servicer (the place where the mortgage payment is sent) and also in budgeting, helping homeowners decide which direction they need to go and helping with that transition.
Also, people who use a HUD-certified housing counselor in Delaware and have undergone unforeseen financial hardship that has affected their ability to stay current on their mortgage – such as temporary loss of employment, illness or divorce – can apply for the Delaware Emergency Mortgage Assistance program, or DEMAP, through the Delaware State Housing Authority, for a loan of up to $15,000. HUD-certified housing counselors can help with that process.
“That’s the only avenue” explained Hoffman of the loan process, which must involve going through the housing counselors. “You can’t file the application yourself.”
She cautioned home owners to beware of anyone charging upfront fees for helping with loan modifications or foreclosure prevention who offers guarantees of any kind, saying many of these companies can’t or won’t stand behind their guarantees and home owners often get nothing in return.
“In foreclosure, it is illegal to collect money up front unless you are the lender,” she emphasized.
Hoffman also said the counselors can help homeowners in deciphering the Making Home Affordable (MHA) Program, a new program under the Obama administration that is designed to help with loan modification and foreclosure prevention.
“The MHA is an outstanding program,” said Hoffman.
She explained that while the MHA was originally intended to address Fannie Mae- and Freddie Mac-owned loans only, many other lenders have since signed on. Many lenders had some sort of loan modification program in place, she said, but MHA gives lenders federally backed financial incentives to help home owners stay at or below 31 percent of their gross pay for their mortgage payments.
Ways in which the lender can do that include lowering the mortgage interest rate for up to five years or extending the life of the loan.
“They do what they have to do to get it down to 31 percent” she said of MHA lenders. “It’s a new and exciting option,” she continued, saying it should be one of the first things lenders are looking at to assist homeowners. “It’s designed to help people afford their monthly payments.”
Hoffman said these workshops and others around the state are a resource for people who might otherwise not know where to turn.
“Get help and get help soon,” she advised. “Don’t fall prey to scams. There are people out there that want to help you.”
Call the Delaware Attorney General’s Mortgage Hotline at 1-800-220-5424 for more information. Report suspected fraud to the Federal Trade Commission, the Attorney General’s Office or the Better Business Bureau.
To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit or www.mymoney.gov. To learn more about avoiding scams, visit http://attorneygeneral.delaware.gov/mortgageforeclosure/index.shtml and click on the PDF “How to avoid mortgage foreclosure scams.”
Other upcoming workshops include: a Mortgage Workshop by NCALL Research Inc. at 110 S. Bedford Street in Georgetown on Oct. 19, from 6 to 8 p.m.
For more information on that workshop, contact Nathaniel Horsey at (302) 678-9400.
A foreclosure seminar will be held by First State Community Action Agency at 308 North Railroad Avenue in Georgetown on Oct. 24, from 10 a.m. to noon.
For other dates, times and locations of workshops, visit www.delawareforeclosurehelp.org/events.php.