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Predatory Real Estate Practices& The Homeownership Sustainability Fund Program (HSF)
Lloyd P. London, Director
September 14, 2007
Homeownership Sustainability Fund Program (HSF)
The Homeownership Sustainability Fund (HSF), formerly the National Anti-Predatory Lending Consumer Rescue Loan Program (CRF), was designed to get borrowers out of abusive and predatory loans with a remedial loan and help borrowers at risk of foreclosure get a fresh start. All HSF loans are conventional home mortgage loans with market-like interest rates, no fees, no points, no prepayment penalties, and no insurance or ancillary product sales or offerings.
The FDIC reported that there was roughly $27.5 billion worth of residential mortgage loans that were 90 days or more past due at the close of Q2. If we estimate an average mortgage size of $300k (due in part to the areas in which most of the foreclosures are concentrated), that’s approximately 91,667.00 total households.
….The delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring, rising to 5.12 percent of all loans, up nearly three-fourths of a percentage point from the same period a year ago.
TERRE HAUTE — Indiana continues to be among the worst states in the nation for home foreclosures, according to data released by RealtyTrac, a California-based firm specializing in foreclosed properties.
The Hoosier state was in the top 10 in foreclosures in July, RealtyTrac reported. One house in 609 in Indiana was in foreclosure, compared with one in 693 for the nation as a whole, the firm reported.
…The high number of home foreclosures in Indiana and nationwide follows years of expansion in the subprime mortgage lending business, experts say. Subprime mortgages are typically sold to people with little or no credit, often with little money down.
Arthur Foulkes can be reached at (812) 231-4232 or [email protected]
A predatory loan is an unsuitable loan designed to exploit vulnerable and unsophisticated borrowers. Predatory real estate transactions include property flipping, the over-appraisal of properties, enticing consumers into loan products with terms and conditions that make sustaining their homeownership difficult and any number of schemes or scams that deprive current and future homeowners of achieving the safe and affordable “American Dream”.
David Berenbaum, Executive Vice President- NCRC
QUESTIONS AND ANSWERS
The HSF program will include five components necessary
To have a lasting beneficial effect for the homeowner:
Default counseling and financial education/ foreclosure prevention
Intervention and mediation with lender to assist homeowner as needed
Provides an affordable mortgage refinance
Provide assistance in receiving write-downs, as necessary
Assist member organizations with private enforcement of consumers’ rights and responsibilities
The approval to refinance loans is available in the states of Alabama, Arizona, California, Colorado, Florida, Georgia, Indiana, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas and Wisconsin.
Consumers who have predatory or other high-costs loans secured by real estate and borrowers at risk of foreclosure.
Consumers who have made good faith efforts to pay their mortgages and are unable to do so due to an involuntary change in their financial circumstances.
Consumers with charge-off accounts at Household/ Beneficial Finance and HSBC affiliates will be handled through our mediation process and are not eligible to be refinanced in the HSF Program
1-2 unit residential properties, manufactured housing, condominiums and PUDs. Properties must be owner occupied.
Paid by the lender. There will be no points, no closing costs (appraisal, title, and recording or release fees) and no prepayment penalty.
No insurance will be available or offered nor any side loans.
Escrows available for taxes and homeowner insurance in all states where refinance can be done.
1.) Set Expectations
2.) Listen to the story
3.) Look at financial facts and develop options
4.) Make contact with other services
QUESTIONS AND ANSWERS
The National Community Reinvestment Coalition in its partnership with HSBC-North America brings this opportunity to consumers that have been victims of unfair and abusive lending across the nation. The establishment of the Homeownership Sustainability Fund Program, formerly the National Anti-Predatory Lending Consumer Rescue Fund Program (CRF), shows that the collaboration of these entities can work together in furtherance of a strategy to challenge predatory lending practices and provide a safe and affordable mortgage loan.
QUESTIONS AND ANSWERS