Free Money & Help To Avoid Foreclosure

Tips for Avoiding Foreclosure
U.S. Department of Housing and Urban Development

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

* Don't ignore the letters from your lender
* Contact your lender immediately
* Contact a HUD-approved Housing Counseling Agency
* Toll FREE (800) 569-4287
* TTY (800) 877-8339

If you are unable to make your mortgage payment:

1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.fha.gov/foreclosure/index.cfm.

6. Contact a HUD-approved housing counselor.
The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.


You Can Avoid Foreclosure and Keep Your Home



Federal Housing Administration

Losing a home can be financially and personally devastating. Here's information to help you keep your home. Relief may be available.

* People facing money problems:
If you are facing unemployment or have money problems, you may be able to keep your home if you know the right steps to take. Read on for important information and links to local organizations that can help you get through difficult times without losing your home. Government organizations and the mortgage industry worked together to provide this information to help you keep your home.



* Disaster area victims:
If you live or work in an area declared a disaster by the President and the hurricane, tornado, flood, wildfire, or other natural or man-made event damaged your home or reduced your income, your lender will provide disaster relief:
o For 90 days on an FHA-insured loan.
o In most cases for other loans.



* Military personnel and spouses:
If you or your spouse is on active military duty, you may qualify for a reduction in your interest rate resulting in lower payments. Read how the Servicemembers Civil Relief Act of 2003 (formerly the Soldiers' and Sailors' Civil Relief Act of 1940) affects military homeowners.

Facing Money Problems:

Financial problems are most often associated with major life changes like:

* Job loss
* Cuts in work hours or overtime
* Retirement
* Illness, injury, or death of a family member
* Divorce or separation

If your family is facing any of these issues and you can't pay your bills, look closely at what you owe and what you earn. Eliminate unnecessary spending and reach out for help if you still can't make ends meet. Taking action right away can help you protect your family from the loss of your home.

Steps To Take When You May Not Be Unable To Pay Your Mortgage: -

1. Contact your lender as soon as you have a problem
Many people avoid calling lenders about money troubles because we:

o Feel embarrassed discussing money problems with others
o Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt)


But lenders want to help borrowers keep their homes because:

o Foreclosure is expensive for lenders, mortgage insurers and investors
o HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems


Lenders have workout options (choices) to help you and:

o These options work best when your loan is only one or two payments behind
o The farther behind you are on your payments, the fewer options are available


Don't assume that your problems will quickly correct themselves:

o Don't lose valuable time being overly optimistic
o Contact your mortgage lender to discuss your circumstances as soon as you realize that you're unable to make your payments
o Look forward to your lender being willing to explore many possible solutions, without guaranteeing any one particular solution



Finding your lender
Check the following sources to contact your lender:

+ Your monthly mortgage billing statement
+ Your payment coupon book



Information to have ready when you call
To help you, lenders usually need:

+ Your loan account number
+ A brief explanation of your circumstances
+ Recent income documents:
# Pay stubs
# Benefit statements from Social Security, disability, unemployment, retirement, or public assistance
# Tax returns or a year-to-date profit and loss statement, if self-employed
# A list of household expenses

Expect to have more than one phone conversation with your lender. Typically, your lender will mail you a "loan workout" package. This package contains information, forms and instructions. If you want to be considered for assistance you must complete the forms fully and truthfully and return them to your lender quickly. Your lender will review the complete package before talking about a solution with you.

CALL YOUR LENDER TODAY! The sooner you call, the sooner help is available.

Don't ignore mail from your lender

If you don't get in touch with your lender, your lender will try to contact you by mail and phone soon after you stop making payments. It is very important that you respond to mail and phone calls offering help. If your lender doesn't hear from you, they will have to start legal action leading to foreclosure. This will greatly increase the cost to bring your loan current.

Information for families with FHA loans

The FHA provides many alternatives and ways for borrowers to get help. These may include mortgage modifications (changes), special forbearances (allowances), and other actions you can take to avoid foreclosure.

FHA works closely with customers who have FHA-insured loans. Do you feel your lender is not responding to your questions? Do you need help contacting your lender? The FHA is ready to help! Contact them at (800) CALL-FHA.

2. Talk to a housing counselor

If you don't feel comfortable talking with your lender, you should immediately contact a housing counseling agency and make an appointment with a counselor. Most FHA counselors are free or cost very little. A counselor can help you:

o Review your financial situation, determine what options are available to you, and negotiate with your lender
o Learn which of the various workout arrangements lenders consider makes the most sense for you and your family, based on your circumstances
o Call the lender with you or on your behalf to discuss a workout plan
o Protect you from future credit problems before you get too far behind on mortgage payments
o Give you information on services and programs in your area that provide financial, legal, medical or other assistance

A good counselor will help you create a monthly budget plan to ensure you meet all your monthly expenses, including your mortgage payment. Your personal financial plan will clearly show how much money you have available to make the mortgage payment. This analysis will help you and your lender determine whether a reduced or delayed payment schedule could help you.

To find out more about HUD-approved housing counseling agencies and their services, please call toll free (800) 569-4287 on weekdays between 9:00 a.m. and 5:00 p.m. Eastern Standard Time (6:00 a.m. to 2:00 p.m. Pacific Time). The same number can give you an automated referral to the three housing counseling agencies located closest to you. You can also find them online at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

Many of these local housing counseling agencies are connected with national and regional housing counseling intermediaries (mediators). The website for HUD-approved National and Regional Housing Counseling Intermediaries describes the full range of assistance offered and provides maps showing their member's locations. You can find them online at http://www.hud.gov/offices/hsg/sfh/hcc/nrhci.cfm

3. Prioritize your debts (rank them by importance)

You will need a new, tightened budget if you lose a job. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.

Failing to pay any of your debts can seriously affect your credit rating, but if you stop making your mortgage payments you could lose your house. Try these suggestions to keep your home:

o Whenever possible, use any income available after paying for food and utilities to pay your monthly mortgage payments.
o If your employment income has stopped or been reduced, first consider getting rid of or cutting back on other expenses (such as dining out, entertainment, cable, or even telephone services).
o If you still do not have enough income, consider cashing out other financial resources like stocks, savings accounts, or personal property that may have value like a boat or a second car.
o Take any responsible action that will save cash.

Besides speaking with your lender, you may want to contact a nonprofit consumer credit counseling agency that specializes in helping restructure credit payments. Credit counselors can often reduce your monthly bills by negotiating lower payments or long-term payment plans with your creditors. Trustworthy credit counseling agencies provide their services free of charge or for a small monthly fee tied to a repayment plan. Beware of credit counseling agencies that offer counseling for a large upfront fee or donation.

For consumer debt advice, contact: www.debtadvice.org/

When you call a credit counseling agency, they will ask you to provide current information about your income and expenses. Make sure you ask if the agency has a charge before you sign any documents!

Preserve your good credit

Do not underestimate (misjudge) how important it is to keep your good credit. Your future ability to purchase items, rent or buy a home, and do other things often requires a credit check. Consumer credit agencies and your lender can help you explore solutions to keep your credit rating from getting blemished.

Maintaining good credit is even important for job hunters. When you apply for a job, the employer probably will check your credit report to determine whether:

· You have been sued

· You have filed for bankruptcy

· You have trouble paying your bills

4. Explore loan workout solutions with your lender

First and foremost, if you can keep your mortgage current, do so.
But if you find you are unable to make your mortgage payments, you might qualify for a loan workout option. Check with your lender to see which option may be available. Some options may not apply to your loan if it is not insured by FHA.

If your problem is temporary - call your lender to discuss these possibilities:

o Reinstatement: Your lender is always willing to discuss accepting the total amount owed in a lump sum by a specific date. Forbearance may accompany this option.
o Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time and then agree to another option to bring your loan current. A forbearance option is often combined with a reinstatement when you know you will have enough money to bring the account current at a specific time. The money might come from a hiring bonus, investment, insurance settlement, or tax refund.
o Repayment plan: You may be able to get an agreement to resume making your regular monthly payments, plus a portion of the past due payments each month until you are caught up.

If it appears that your situation is long-term or will permanently affect your ability to bring your account current - call your lender to discuss options:

o Mortgage modification: If you can make payments on your loan, but don't have enough money to bring your account current or you can't afford your current payment, your lender may be able to change the terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:
+ Adding the missed payments to the existing loan balance.
+ Changing the interest rate, including making an adjustable rate into a fixed rate.
+ Extending the number of years you have to repay.
o Partial Claim: If your mortgage is insured, your lender might help you get a one-time interest-free loan from your mortgage guarantor to bring your account current. You may be allowed to wait several years before repaying this loan. You qualify for an FHA partial claim if:
+ Your loan is between 4 and 12 months delinquen
+ You are able to begin making full mortgage payments again

When your lender files a partial claim, HUD will pay your lender the amount necessary to bring your mortgage current. You must sign a promissory note, and a lien will be placed on your property until the promissory note is paid in full.

The promissory note is interest-free and is due when you pay off the first mortgage or when you sell the property.

If keeping your home is not an option - call your lender to discuss these possibilities:

o Sale: If you can no longer afford your home, your lender will usually give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to use the services of a real estate professional who can aggressively market the property.
o Pre-foreclosure sale or short payoff: If you can't sell the property for the full amount of the loan, your lender may accept less than the amount owed. Financial help may also be available to pay other lien holders and/or help towards some moving costs. You may qualify if:
+ The loan is at least 2 months delinquent
+ You (or your real estate professional) can sell the house within 3 to 5 months
+ A new appraisal (obtained by your lender) shows that the value of your home meets HUD program guidelines
o Assumption: A qualified buyer may be allowed to take over your mortgage, even if your original loan documents state that it is non-assumable.
o Deed-in-lieu of foreclosure: As a last resort, you "give back" your property and the debt is forgiven. This will not save your house, but it is less damaging to your credit rating. This option might sound like the easiest way out, but it has limitations:
+ You usually have to try to sell the home for its fair market value for at least 90 days before the lender will consider this option
+ This option may not be available if you have other liens, suc h as other creditor judgments, second mortgages, and IRS or state tax liens

Resources for finding a real estate agent and selling your home

If you need to sell your home, you'll have to answer many questions. You'll need to find how much your house is actually worth, and you'll have to find a real estate agent you are comfortable with. The following resources may help:

* National Association of Realtors
* National Association of Real Estate Brokers
* International Real Estate Digest
* National Association of Hispanic Real Estate Professionals
* The Home Store

If you have an FHA-insured loan and your lender is not responsive

Your lender has to follow FHA servicing guidelines and regulations for FHA-insured loans. If your lender is not cooperative, contact FHA's National Servicing Center at toll free (888) 297-8685 or via email: hsg-lossmit@hud.gov. HUD does not oversee VA or conventional loans.

Beware of predatory lending schemes

Most mortgage lenders are trustworthy and provide a valuable service by allowing families to own a home without saving enough money to buy it outright. But dishonest or "predatory" lenders do exist and engage in lending practices that increase the chances that a borrower will lose a home to foreclosure. Beware especially of those who make high risk second mortgages. Other abusive practices include:

* Making a mortgage loan to an individual who does not have the income to repay it
* Charging excessive interest, points and fees
* Repeatedly refinancing a loan without providing any real value to the borrower

Borrowers facing unemployment and/or foreclosure are often targets of predatory lenders because they are desperate to find any "solution".

Homeowners receive many refinance offers in the mail saying they are "pre-approved" for credit based on the equity in their homes. Borrowing against your house may seem attractive when you are struggling to pay your mortgage and other bills. But stop and think about this: if you can't make your current payments, increasing your debt will make it harder to keep your home, even if you get some temporary cash.

Beware of scams

* Equity skimming: In this type of scam a "buyer" approaches you offering to repay the mortgage or sell the property if you sign over the deed and move out - usually leaving you with the debt and no house. Signing over your deed does not necessarily relieve you of the responsibility of paying the loan.
* Phony counseling agencies: charging for counseling that is often free of charge. If you have any doubt about paying for such services, call a HUD-approved foreclosure housing counseling agency toll free at (800) 569-4287 or TDD (800) 877-8339 before you pay anyone or sign anything.
* Do not sign anything you do not understand. It is your right and duty to ask questions
* Information is your best defense against becoming a victim of predatory lending, especially for a desperate homeowner

Where to report suspected predatory lending

Homeowners can either visit the Stop Mortgage Fraud website at www.stopmortgagefraud.com or call toll free (800) 348-3931 to get information on what steps to take to file a complaint. Homeowners who call will also receive a booklet containing information found on the website.

For more information about predatory lending go to:

* Freddie MAC's Predatory Lending at http://www.freddiemac.com/corporate/buyown/english/mortgages/lenders/avoiding_predlend.html
* Freddie MAC's "Don't Borrow Trouble" at www.dontborrowtrouble.com

Mortgage lenders

The mortgage lenders listed below have voluntarily joined the federal government to assist homeowners who are concerned about the future or have suffered due to recent changes in the economy. If your lender is listed here, you can help protect your home by contacting them immediately! <<>>

Servicemembers Civil Relief Act (SCRA) Common Questions

Reservists, guardsmen and other military personnel can find answers to questions about mortgage payment relief and protection from foreclosure provided by the Servicemembers Civil Relief Act of 2003 (formerly The Soldiers' and Sailors' Civil Relief Act of 1940).

Who is eligible?

The Act applies to active duty military personnel who had a mortgage obligation before enlistment or before being ordered to active duty. This includes:

* Members of the Army, Navy, Marine Corps, Air Force, Coast Guard
* Commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration engaged in active service
* Reservists ordered to report for military service
* People ordered to report for induction (training) under the Military Selective Service Act
* Guardsmen called to active service for more than 30 consecutive days.

In limited situations, dependents of servicemembers are also entitled to protections.

Am I entitled to debt payment relief?

The Act limits interest that may be charged on mortgages taken out by a servicemember (including debts incurred jointly with a spouse) before he or she entered into active military service. At your request, lenders must reduce the interest rate to no more than 6% per year during the period of active military service and recalculate your payments to reflect the lower rate. This provision applies to both conventional and government-insured mortgages.

Is the interest rate limitation automatic?

No. To ask for this temporary interest rate reduction, you must submit a written request to your mortgage lender and include a copy of your military orders. The request may be submitted as soon as the orders are issued, but no later than 180 days after the date of your release from active duty military service.

Am I eligible even if I can afford to pay my mortgage at a higher interest rate? -

If a mortgage lender believes that military service has not affected your ability to repay your mortgage, they have the right to ask a court to grant relief from the interest rate reduction. This is does not happen very often.

What if I can't afford to pay my mortgage even at the lower rate?

Your mortgage lender may let you stop paying the principal amount due on your loan during active duty service. Lenders are not required to do this but they generally try to work with servicemembers to keep them in their homes. You will still owe this amount, but will not have to repay it until after you complete active duty service.

Most lenders also have other programs to assist borrowers who can't make their mortgage payments. If you or your spouse finds yourself in this position at any time before or after active duty service, contact your lender immediately and ask about loss mitigation options. If you have an FHA-insured loan and are having difficulty making mortgage payments, you may also be eligible for special forbearance and other loss mitigation options.

Am I protected against foreclosure?

Mortgage lenders may not foreclose while you are on active duty or within 90 days after military service without court approval., A lender would be required to show in court that your ability to repay the debt was not affected by your military service.

What information do I need to provide to my lender?

When you or your representative contacts your mortgage lender, you should provide the following information:

* Notice that you have been called to active duty
* A copy of the orders from the military notifying you of your activation
* Your FHA case number
* Evidence that the debt precedes your activation date

HUD has reminded FHA lenders of their obligation to follow the SCRA. When notified that a borrower is on active military duty, an FHA lender must inform the borrower or representative of the adjusted payment amount due, provide adjusted coupons or billings, and ensure adjusted payments are not considered insufficient payments.

Will my payments change later? Will I need to pay back the interest rate "subsidy" at a later date?

The change in interest rate is not a subsidy. Interest in excess of 6% per year that would otherwise have been charged is forgiven. However, the reduction in the interest rate and monthly payment amount only applies during the period of active duty. Once the period of active military service ends, the interest rate will revert back to the original interest rate, and payments will be recalculated accordingly.

How long does the benefit last? Does the period begin and end with my tour of duty?

Interest rate reductions are only for the period of active military service. Other benefits, such as postponement (delaying) of monthly principal payments on the loan and restrictions on foreclosure, may begin immediately upon assignment to active military service and end on the third month following the term of active duty assignment.

How can I learn more about relief available to active duty military personnel?

Servicemembers who have questions about the SCRA or the protections they may be entitled to, can contact their unit judge advocate or installation legal assistance officer. Dependents of servicemembers can also contact or visit local military legal assistance offices where they live. A military legal assistance office locator for each branch of the armed forces is available at www.legalassistance.law.af.mil/content/locator.php



Putting Your Home on the Loan Line is Risky Business



Federal Reserve System



Are you in need of cash?

Do you want to consolidate your debts?

Are you receiving home equity loan or refinancing offers that seem too good to be true?

Does your home need repairs that contractors tell you can be easily financed?

If you are a homeowner who needs money to pay bills or for home repairs, you may think a home equity loan is the answer. But not all loans and lenders are the same--you should shop around. The cost of doing business with high-cost lenders can be excessive and, sometimes, downright abusive. For example, certain lenders--often called "predatory lenders"--target homeowners who have low incomes or credit problems or who are elderly by deceiving them about loan terms or giving them loans they cannot afford to repay.

Borrowing from an unscrupulous lender, especially one who offers you a high-cost loan using your home as security, is risky business. You could lose your home and your money. Before you sign on the line:

* Think about your options
* Do your homework
* Think twice before you sign
* Know that you have rights under the law

Think about Your Options

If you’re having money problems, consider these options before you put your home on the loan line.

· Talk with your creditors or with representatives of non-profit or other reputable credit or budget counseling organizations to work out a plan that reduces your bill payments to a more manageable level.

· Contact your local social service agency, community or religious groups, and local or state housing agencies. They may have programs that help consumers, including the elderly and those with disabilities, with energy bills, home repairs, or other emergency needs.

· Contact a local housing counseling agency to discuss your needs. Call the U.S. Department of Housing and Urban Development toll-free at 800-569-4287 or visit www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm to find a center near you.

· Talk with someone other than the lender or broker offering the loan who is knowledgeable and you trust before making any decisions. Remember, if you decide to get a home equity loan and can’t make the payments, the lender could foreclose and you would lose your home.

If you decide a loan is right for you, talk with several lenders, including at least one bank, savings and loan, or credit union in your community. Their loans may cost less than loans from finance companies. And don’t assume that if you’re on a fixed income or have credit problems, you won’t qualify for a loan from a bank, savings and loan, or credit union--they may have the loan you want!
Do Your Homework

Contact several lenders--and be very careful about dealing with a lender who just appears at your door, calls you, or sends you mail. Ask friends and family for recommendations of lenders. Talk with banks, savings and loans, credit unions, and other lenders. If you choose to use a mortgage broker, remember they arrange loans but most do not lend directly. Compare their offers with those of other direct lenders.

Be wary of home repair contractors that offer to arrange financing. You should still talk with other lenders to make sure you get the best deal. You may want to have the loan proceeds sent directly to you, not the contractor.

Comparison shop. Comparing loan plans can help you get a better deal. Whether you begin your shopping by reading ads in your local newspapers, searching on the Internet, or looking in the phone book, ask lenders to explain the best loan plans they have for you. Beware of loan terms and conditions that may mean higher costs for you. Get answers to these questions and use the worksheet to compare loan plans:
Interest Rate and Payments:

* What are the monthly payments? Ask yourself if you can afford them.
* What is the annual percentage rate (APR) on the loan? The APR is the cost of credit, expressed as a yearly rate. You can use the APR to compare one loan with another.
* Will the interest rate change during the life of the loan? If so, when, how often, and by how much?

Term of Loan:

* How many years will you have to repay the loan?
* Is this a loan or a line of credit? A loan is for a fixed amount of money for a specific period of time; a line of credit is an amount of money you can draw as you need it.
* Is there a balloon payment--a large single payment at the end of the loan term after a series of low monthly payments? When the balloon payment is due, you must pay the entire amount.

Points and Fees:

* What will you have to pay in points and fees? One point equals 1 percent of the loan amount (1 point on a $10,000 loan is $100). Generally, the higher the points, the lower the interest rate. If points and fees are more than 5 percent of the loan amount, ask why. Traditional financial institutions normally charge between 1 and 3 percent of the loan amount in points and fees.
* Are any of the application fees refundable if you don’t get the loan?
* How and how much will the the lender or broker be paid? Lenders and brokers may charge points or fees that you must pay at closing or add on to the cost of your loan, or both.

Penalties:

* What is the penalty for late or missed payments?
* What is the penalty if you pay off or refinance the loan early (that is, is there a pre-payment penalty)?

Credit Insurance:

* Does the loan package include optional credit insurance, such as credit life, disability, or unemployment insurance? Depending on the type of policy, credit insurance can cover some or all of your payments if you can't make them. Understand that you don’t have to buy optional credit insurance--that’s why it’s called “optional.” Don’t buy insurance you don’t need.
* Credit insurance may be a bad deal for you, especially if the premiums are collected up-front at the closing and financed as part of the loan. If you want optional credit insurance, ask if you can pay for it on a monthly basis after the loan is approved and closed. With monthly insurance premiums, you don't pay interest and you can decide to cancel if the premiums are too high or if you believe you no longer want the insurance.

After you have answers to these questions, start negotiating with more than one lender. Don’t be afraid to make lenders and brokers compete for your business by letting them know you are shopping for the best deal. Ask each lender to lower the points, fees, or interest rate. And ask each to meet--or beat--the terms of the other lenders.
Once You’ve Selected a Lender, Get the Following…

* A “Good Faith Estimate” of all loan charges. The estimate must be sent within 3 days of applying.
* Blank copies of the forms you’ll sign at closing, when the loan is final. Study them. If you don’t understand something, ask for an explanation.
* Advance copies of the forms you’ll sign at closing with the terms filled in. A week or two before closing, contact the lender to find out if there have been any changes in the Good Faith Estimate. By law, you can inspect the final settlement statement (also called the HUD-1 or HUD-1A form) one day prior to closing. Study these forms. Write down any questions you want to ask.

Think Twice before You Sign…
· Have a knowledgeable friend, relative, attorney, or housing counselor review the Good Faith Estimate and other loan papers before you sign the loan contract. Be sure the terms are the same ones you agreed to. For example, a lender should not promise one APR and then--without good reason--increase it at closing.
· Refer to the list of questions you’ve written down. Ask where these terms are covered in the loan contract. And ask for an explanation of any dollar amount or term you don’t understand. Don’t let anyone rush you into signing the loan contract.
· Make sure all promises, oral and otherwise, are put in writing. It’s only what’s in writing that counts.
· Get a copy of the documents you signed before you leave the closing.
Don’t Sign on the Dotted Line if the Lender …

* Tells you to falsify information on the loan application (for example, suggests that you write down more income than you really have).
* Pressures you into applying for a loan for more money than you need, or one that has monthly payments larger than you can afford.
* Promises one set of terms but gives you another with no good reason for the change.
* Tells you to sign blank forms or forms that aren't completely filled in. If an item is supposed to be blank, draw a line through the space and initial it.
* Pressures you to sign today. A good deal today should be available tomorrow.

Know that You Have Rights under the Law
You Have 3 Business Days to Cancel the Loan

If you're using your home as security for a home equity loan (or for a second mortgage loan or a line of credit), federal law gives you 3 business days after signing the loan papers to cancel the deal--for any reason--without penalty. You must cancel in writing. The lender must return any money you have paid to date.
Do You Think You've Made a Mistake?

Has the 3-day period during which you may cancel passed and you're worried that you've gotten in over your head? Do you think your loan fees were too high? Do you believe you were steered into monthly payments you can't afford? Has your lender repeatedly pressured you to refinance? Is your loan covered by insurance you don't need or want?

If you think you've been taken advantage of, state and federal laws may protect you. Also, the following organizations may be able to help:

· Your local or state bar association--sometimes listed under "Lawyers Referral Service" in the Yellow Pages of your phone book. The association may be able to refer you to low-cost or no-cost lawyers who can help.

· Your local consumer protection agency, state attorney general’s office, or state office on aging, listed in the Blue Pages of your phone book.

· Your local fair housing group or affordable housing agency, housing counseling agency, or state housing agency.

You can learn more about credit and home equity loans by visiting the federal government’s web site for consumers, www.consumer.gov (see the Home and Community section).The Mortgage Comparison Calculator allows you to compare the monthly payments and the amount of equity you will build in your home for several types of mortgages. If you don’t have access to the Internet, ask a friend or relative to get the information for you. Or visit your local library or senior center, which may offer you free access to the Internet on their computers.
For More Information
State Banks that Are Members of the Federal Reserve System

Division of Consumer and Community Affairs
Mail Stop 801
Federal Reserve Board
Washington, DC 20551
(202) 452-3693
www.federalreserve.gov
Federally Insured State Non-Member Banks and Savings Banks

Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Boulevard, Suite 100
Kansas City, Missouri 64108
(877) 275-3342
www.fdic.gov
National Banks and National Bank-Owned Mortgage Companies

Office of the Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, TX 77010
(800) 613-6743
www.occ.treas.gov
Federally Insured Savings and Loan Institutions and Federally Chartered Savings Banks

Office of Thrift Supervision
Consumer Programs
1700 G Street, N.W., 6th Floor
Washington, DC 20552
(800) 842-6929
www.ot, s,, ,, , , .treas.gov
Federal Credit Unions

National Credit Union Administration
Office of Public and Congressional Affairs
1775 Duke Street
Alexandria, VA 22314
(703) 518-6330
www.ncua.gov
For state-chartered credit unions, contact your state's regulatory agency.
Mortgage Companies and Other Lenders

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, N.W.
Washington, DC 20580
(877) FTC-HELP (877-382-4357, toll free)
www.ftc.gov
Other Information Sources

U.S. Department of Justice
Civil Rights Division
950 Pennsylvania Ave., N.W.
Housing and Civil Enforcement Section, NWB
Washington, DC 20580
(202) 514-4713
www.usdoj.gov/crt/housing/index.html


Federal Housing Finance Board
1777 F Street, N.W.
Washington, DC 20006
(202) 408-2500
www.fhfb.gov


Department of Housing and Urban Development
451 7th Street, S.W.
Washington, DC 20410
800-669-9777 (voice)
800-927-9275 (TTY)
www.hud.gov


Office of Federal Housing Enterprise Oversight (OFHEO)
1700 G Street, N.W.
4th Floor
Washington, DC 20552
(202) 414-6922
www.ofheo.gov