Posts Tagged ‘United States Department of Housing and Urban Development’

Reverse Mortgage Consideration – WABI-TV

Video of interview featured January 7th WABI-5 Morning News

This morning, Russ Van Arsdale with Northeast Contact discussed reverse mortgages also known as a home equity conversion mortgage.

It’s a financing arrangement for people 62 and older who own their homes outright or have a small mortgage. Instead of you making payments, a reverse mortgage allows you to receive money, based on the equity of your home.

Russ warned our viewers that the deal can be too good to be true.

He advises folks to log onto www.hud.gov and search for reverse mortgage.

Also, if you are approved for a reverse mortgage, you still need to pay for normal maintenance on the home, pay for property taxes and homeowners insurance, pay the mortgage insurance premium, and pay loan orientation and servicing fees and closing costs.

You’ll also probably pay a $125 feed for counseling with an organization approved by the U.S Department of Housing and Urban Development. That’s required to get a reverse mortgage, although the fee can be waived.

Latest HUD information could help mortgage holders

CONSUMER FORUM

By Russ Van Arsdale, Executive Director
Northeast Contact

Posted March 17, 2012, at 4:34 p.m.

Over the past week or so, Northeast CONTACT has heard from two Maine consumers who have mortgage problems. They represent a large number of people facing life-changing financial situations. The bad news is that a lot of mortgage holders have been mistreated by lending institutions. The good news is there may be some help coming for them soon.

The inspector general of the U.S. Department of Housing and Urban Development released a report last week spreading around the blame for the mortgage problems. The “robo-signing” of legal documents by officials at the country’s biggest banks already has been well-documented. The new report charged that bank managers are encouraged to hurry foreclosure paperwork through the system. Some employees were rated on their ability to keep the papers flying. Often, their supervisors were unaware of the facts of the foreclosures.

“I believe the reports we just released will leave the reader asking one question: ‘How could so many people have participated in this misconduct?’” David Montoya, HUD inspector general, said in a statement. “The answer: simple greed.”

The big five banks — Ally Financial, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo — have reached a general agreement with federal and state authorities. When all the details are negotiated, the agreement could give a measure of relief to affected consumers while heading off protracted court battles over who’s to blame.

Maine Attorney General William Schneider’s office is taking part in those discussions. A recent report to the Maine Legislature suggests that, if a settlement is reached, some of the funds could be set aside for foreclosure prevention programs the state runs. The report says more should be known about the status of those negotiations sometime in April.

For people with mortgages in Maine, the drum has been beating as loudly as anywhere. And many of the homeowners who are in financial trouble turn to people who bill themselves as mortgage counselors but who often may do more harm than good.

Maine’s Bureau of Consumer Credit Protection hears from people every day who are facing foreclosure, and many have dealt with such “counselors.” Bureau Superintendent William Lund says roughly 10 percent of those consumers have sent money — sometimes thousands of dollars — to unlicensed, out-of-state mortgage rescue companies and sometimes law firms. Their help usually is slow in coming.

“The real harm is that consumers have wasted precious time waiting in vain for these firms to negotiate loan modifications on their behalf,” Lund said. “Free, HUD-certified housing counselors located here in Maine are available to homeowners, and we can make referrals for any consumers who call us on the state’s official foreclosure prevention hot line, 1-888-664-2569 (1-888-NO-4-CLOZ).”

Find out more about preventing foreclosure on our blog, http://necontact.wordpress.com. Scroll down to the panel labeled “Self Help” and click on “Foreclosure Prevention Kit.” There you can find toll-free numbers for the five large banks involved in the settlement. You’ll also find a link (www.nationalmortgagesettlement.com) you can use to get about details of the settlement as negotiations continue.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to necontact.wordpress.com, or email contacexdir@live.com.

State Orders Lender to Cease Taking Applications and Transfer Pending Mortgage Files

GARDINER, Maine – The Bureau of Consumer Credit Protection has ordered Texas-based Allied Home Mortgage Corporation to cease accepting new mortgage applications from Maine consumers, and to transfer pending applications to other licensed lenders.

The action is a result of Tuesday’s decisions by the U.S. Department of Housing and Urban Development (HUD) and Government National Mortgage Association (“Ginnie Mae”) to suspend Allied’s ability to originate or underwrite mortgages insured by the Federal Housing Administration (FHA). The Texas corporation is accused by federal authorities of unsafe lending practices leading to large numbers of defaults and forcing HUD to pay out millions of dollars in mortgage insurance.

The company maintained a licensed branch location in Scarborough, Maine. The office closed this week and most of the 7 employees plan to affiliate with another licensed lender or loan broker.

“We took this action in order to protect Maine’s consumers and prevent the company from accepting applications for mortgages that will likely not materialize,” Bureau Superintendent William N. Lund stated.

Lund said his office has been working with the principals of the Scarborough office this week to place pending applications with other lenders. “The loan originators at the local office have cooperated completely,” Lund commented. “They have provided a full report of all loans in the pipeline, and have provided updates several times each day.”

Licensed lenders must post a surety bond with the Bureau, and the proceeds would be available to compensate borrowers for provable losses as a result of the closing of the company. Any Maine consumers with questions about their pending applications or mortgage loans with Allied Home Mortgage Corporation can contact the Bureau of Consumer Credit Protection at 1-800-332-8529 for more information.

 

The Bureau of Consumer Credit Protection is part of Maine’s Department of Professional and Financial Regulation. The Bureau licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars to advise consumers and creditors of their legal rights and responsibilities.

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