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I am providing you with this information from the Utah Coalition to help educate you during this very difficult time. Please call or email me, because I can help!

 

Foreclosure Prevention

Workbook

A decisionmaking tool for homeowners exploring ways to save their homes and their financial wellbeing from the foreclosure crisis.

Presented by the Utah Housing Coalition to the people of Utah.

TOPIC 1: Phases of Foreclosure 7

Diagram of the Delinquency Cycle – 180 Days 8

Think about Your Situation Worksheet 10

TOPIC 2: Show Me the Money 11

Show me the money/What do I have? 13

Monthly Expenses/Where is my money going? 14

Household Assets/Budget Outcomes 15

Affordability Analysis/Am I able to keep my home? 16

TOPIC 3: Know your Mortgage 17

Promissory Note 19

Deed of Trust 19

Prepayment Penalty Rider 19

Truth in Lending 19

HUD 1 Settlement/Closing Statement 19

Adjustable Rate Mortgage Rider 19

What about My Mortgage 20

TOPIC 4: Know your Options – What happens now? 21

Options involving and not involving a lender 22

Options to keep your loan/your home 22

Options not keeping your home/Exiting gracefully 23

TOPIC 5: Beware of Scams 25

Bailout 26

Bait & Switch 26

Equity Stripping 26

Foreclosure Scams 26

Phantom Help 26

New Scams 26

TOPIC 6: Rebuilding after Foreclosure 27

Information and Referral 28

Legal Assistance 28

Housing Assistance 28

Community Action Programs of Utah 29

Housing and Financial Counseling 29

Helpful Organizations and Websites 30

APPENDIX (Tools) 35

Document List 36

Keep on Top Communication Log 37

Release of Authorization Letter (Sample) 39

Hardship Letter (Sample) 40

Authorization to Release Information (Sample) 41

Counselor and Homeowner Agreement (Sample) 42

Know your Lingo 44

Homeowner Information Sheet 46

What’s My House Worth? 47

Disclaimer 54

Utah Taskforce Prevention Taskforce 2008 55

TOPIC 1

Phases of Foreclosure

Process from Late to Auction Date 180 Days

Although you are late from 1 st day after the due date, the COLLECTIONS, sometimes

referred to as the LOAN SERVICING Department, of your mortgage company will

start calling you between the 16 th and the 30th of the month.

What happens after I am 30 days late?

What is the Collections or Loan Servicing Department?

· Collections is a loan servicing division of the mortgage company that accepts and

applies your payment each month, tracks any late fees, monitors and when included

in your payment, will pay the taxes and insurance when due. They will contact you

when payments are missed.

· The “collections” or “loan servicing” department will start calling you to collect the

past due payment.

What happens after I am 60 days late?

On the 61 st day, the loan payment is 2 months past due, and if the Collections

department has not been able to collect or make acceptable payment arrangements with

you, your account will be turned over to the LOSS MITIGATION DEPARTMENT

also know as HOME PRESERVATION AND WORKOUT DEPARTMENT.

What is Loss Mitigation?

· This is a division of the mortgage company that will work with you on an acceptable

plan to get you back on track with your mortgage payments (Home Preservation).

· You will begin to receive letters requesting that you call them. This is the period

where you will have more options available to you.

· They will make many attempts to contact you during this period.

What happens after I am 90 days late?

On the 91 st day, a third party TRUSTEE (typically an attorney) takes over your

delinquent account. The Trustee will send a “Notice of Default” stating that the

property will be sold 90 days from the date the Notice was filed and recorded. There

will be a notice published in the newspaper once a week for the four weeks preceding

the sale. You will typically receive a “Notice of Trustee Sale” about four weeks prior to

the sale date detailing the actual date your home will be sold.

What is the process?

· Mortgage company will not send you any more letters. It is now totally up to you to

contact them directly as soon as possible, or through a U.S. HUD certified housing

counselor.

· Unless you act quickly, your house will be sold at auction on the date specified.

NOTE: The total number of days of delinquency (90, 120, 180) depends on your

mortgage servicer.

Think About Your Situation Worksheet

To help you write a Hardship Letter (see sample in back under Tools)

What caused your situation? When did you miss your first payment (date)? Why did

you miss this and any other payments? Please be as accurate as possible.

How have you tried to fix your financial situation?

Once you complete this exercise, you will be ready to write a Hardship Letter. Please see the

Appendix for a sample Hardship Letter. When you begin to work out options with your

mortgage lender, you will need a Hardship Letter.

TOPIC 2

Show Me the Money My Notes

Show Me the Money!

 

What do I have?

Sources of Income Homeowner A Homeonwer B TOTAL

A & B

Monthly Income Employer $ $

Social Security /SSI / SSDI

Child or Spousal Support

Unemployment Compensation

Workers Disability Compensation

Veterans Benefits

Retirement Benefits

Monies from Boarders or Roommates

Child care assistance

Housing assistance

Other

Other

Total for Homeowner A $ $

Total for Homeowner B $ $

Total Household Income

(A + B)$

Think About Your Current Situation

§ Do you need control of your finances? § Should you practice money management skills? § What changes should you make to save your home and improve your financial wellbeing? § Where is all the money going

What are your fixed expenses? They are expenses that require set payments on a weekly, monthly or annual basis.

What are your variable expenses? They are expenses which change, fluctuate, vary from month to month. Estimate what these are and keep track for a couple of months.

What are your periodic expenses? They are expenses such as holiday shopping, auto insurance and registration. Guess how much you may spend on these items for an entire year and then divide that amount by 12. That equals how much you should plan to save or budget each month.

Your total expenses are the sum of fixed, variable and periodic expenses. See the following chart which will help you.

Monthly Expenses – Where is my money going?

COLUMN 1 EXPENSE MONTHLY COLUMN 2 EXPENSE MONTHLY

Shelter Contributions & Gifts

Rent or Mortgage Payment $ Church donations $ Homeowner Association Dues Miscellaneous donations Home Maintenance Gifts/cards/Wrapping Accessories Manufactured Home Lot Rent

Food Recreation

Groceries, beverages $ Club dues $Cleaning supplies, paper products Newspapers, magazines, books Food away from home CDs, other music Tobacco/Alcohol Movies Hobbies Utilities Sports Gas, light, water $ Vacations Phone Entertainment Cell/Mobile Phone Garbage, sewer

Insurance Other Expenses

Life $ Kids’ allowances $Auto Day Care (Children/Seniors) Health Babysitting Postage Cable/Satellite TV

Transportation $ Other services Gas & Oil Pets Repairs Registration

 Monthly Obligations

Bus, carpool Alimony/Child Support $ Parking Total Monthly Auto Loan Payments Total Monthly Credit Card Payments

Education Total Monthly Installment Loan Payments Tuition $ Total Other Monthly Obligations Books Special Lessons Sports

Health Care

Medical $Dental Prescriptions

Clothing

New purchases $ Dry cleaning, Laundry

Personal Care

Beauty/Barber Shop $ Nails Other Personal expenses COLUMN 1 TOTAL: $ COLUMN 2 EXPENSE TOTAL: $

COLUMN 1 EXPENSE TOTAL: $

COLUMN 1 + COLUMN 2 = TOTAL EXPENSES: $

Household Assets

Budget Outcomes

What Do I Own? What Am I willing to sell?

Household Assets

Column 1

Column 2

Column 3

Description Value Amount Owed Sell?

a) Automobile #1 $

b) Automobile #2 $

c) Automobile #3 $

d) Cash on Hand Over $100

e) Checking Account $

f) Savings Account

g) Anticipated Tax Refunds

h) Money Market Funds $

i) Stocks/Bonds/CDs/Annuities, etc $

j) IRA / Keogh Accounts $

k) Computer/TV/Electronics $

l) Furniture $

m) Boats / Jet Skis $

n) RV/ Recreational Homes $

o) Motorcycles / Snowmobile $

p) Farm Equipment $

q) Trailers $

r) Other Property $

s) Other: $

t) Total

What is my current lifestyle and what must I change?

Eating out:____________________________________________________________________

Gambling:____________________________________________________________________

Luxuries:_____________________________________________________________________

Cable TV:_____________________________________________________________________

Cell phone:___________________________________________________________________

Other:________________________________________________________________________

Affordability Analysis

 

Based on what we earn, spend, need and can sell,

Am I able to keep (afford) my home?

INCOME & EXPENSES

1. Total Expenses $ Page 13 (Total Col. 1 & 2)

2. Total Monthly Income $ Page 12 (Total A+ B)

3. Line 2 – Line 3 (above) $ What’s Left to cover increased

mortgage payments or other emergencies.

CASH AVAILABLE / NEEDED

4. Homeowner Cash on Hand $ Household Assets, page 14 (line d, Col. 1)

5. Homeowner Assets – SELL $___________ Household Assets, page 14 (line t, Col. 3)

6. Total Cash Available $ Total (Line 4 + Line 5, above)

Additional funds may also be available, depending on your eligibility to qualify for

assistance from a nonprofit, governmental or mortgage company. Eligibility will be

determined upon an evaluation of your income, expenses and assets

TOPIC 3

 

KNOW YOUR MORTGAGE My Notes

Mortgages – Know your Loan(s)

 

The Mortgage/Promissory Note:

The legal evidence of indebtedness and formal promise to repay a debt. It sets out the

amount and terms of the loan and recites the penalties and steps the lender can take if

you fail your payments on time.

Deed of Trust:

The deed of trust helps to verify and protect the legal interest in a property

The property is deeded by the title holder (trustor) to a trustee (often a title or escrow

company) which holds the title in trust for the beneficiary (the lender of the money

Prepayment Penalty Rider:

A prepayment penalty on a mortgage allows the lender to charge a borrower additional

interest, typically six months worth, when a mortgage is repaid during the penalty

period, which is usually somewhere in the first three to five years of the mortgage.

If a mortgage does have a prepayment penalty, this should be clearly stated within the

mortgage disclosures, mortgage note and/or prepayment penalty rider to the note .

TIL (Truth in Lending) Disclosure Statement:

Required by Federal law.

o TIL must be given within 3 business days of initial loan application.

Purpose of TIL:

o Show estimated total costs of borrowing,

o Expected payment amounts over life of loan,

o Other significant features of your loan.

HUD 1 Settlement/Closing Statement

o Prepared by initially by Lender and then by Title Company

o Required by Federal law

o Provides details of sale transaction

o Must be signed by both buyer and seller and becomes

o Part of the lender's permanent loan file

ADJUSTABLE RATE MORTGAGE RIDER (ARM RIDER)

o Adjustablerate

mortgages (ARMs) are loans with interest rates that change.

ARMs may start with lower monthly payments than fixedrate

mortgages, but

there are two important considerations:

o The Adjustment Period

o Borrower Notification

o The interest rate on an ARM is made up of two parts: the index and the margin

o There are different types of ARMs

o Hybrid ARMs

o Interestonly

ARMs

o Paymentoption

ARMs

Call 211

for more information. 20

WHAT ABOUT MY MORTGAGE(S)?

First Mortgage Second Mortgage

(Home Equity Loan)

Where do I

find this*?

What about my Loan?

Original Mortgage Lender DOT*

Original Loan Amount TIL*; P. Note*

Monthly Payment TIL; P. Note

Monthly Due Date TIL; P. Note

Closing Date of the Loan DOT; P. Note

Number of Payments TIL; P. Note

My Loan Type is?

FHA HUD 1*

VA HUD 1

Conventional Loan

MI Company:

HUD 1

Rural Development HUD 1

Other:

What are my Loan Terms?

Fixed Rate TIL; P. Note

Adjustable Rate (ARM)

Type

ARM Rider*;

P. Note

Initial Rate ARM Rider;

P. Note

Index ARM Rider

P. Note

Margin ARM Rider

P. Note

Adjust Date ARM Rider

P. Note

How often Adjusting;

CAPS

ARM Rider

P. Note

Other:

Information included on the monthly mortgage statement

Outstanding Balance

Mortgage Insurance

Homeowners Insurance

Taxes Escrowed

Insurance Escrowed

*ABBREVIATIONS:

DOT: DEED OF TRUST

P. NOTE: PROMISSORY NOTE

TIL: TRUTH IN LENDING

HUD 1: SETTLEMENT CLOSING STATEMENT

ARM – ADJUSTABLE RATE MORTGAG

TOPIC 4

 

KNOW YOUR OPTIONS

WHAT HAPPENS NOW?

KNOW YOUR OPTIONS

Options not involving lender:

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Options working with your Lender depend on factors:

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Options to Keep the Loan/Home: § Repayment : Plan where you pay a full month’s payment plus a partial payment.

___________________________________________________________________________

§ Forbearance: Similar to a Repayment Plan where lender agrees to a modified monthly payment for several months allowing the borrower to catch up.

___________________________________________________________________________

§ Modification: This plan involves more work and may reduce or fix your interest rate, change your term from 30 to 40 or 50 years, or add the delinquent amount to your current amount and reamortize (or reschedule your payments).

______________________________________________________________________________

§ Partial/Advance Claim: This is a second loan with no interest, or very low interest that is repaid after the first loan is paid, but this is available only with insured mortgage loans.

______________________________________________________________________________

§ Refinance: The lender will offer a new loan which may add an additional borrower. There must be adequate equity in the property. This cannot be done if the value of the home is less than the amount owed to the lender.

______________________________________________________________________________

Options to Not Keep Loan/Home – How to Exit Gracefully:

Sell the property: Best option if the borrower cannot afford the mortgage payment and the house is worth more than the amount owed. In the back of this workbook under Tools there is a worksheet “What’s my House Worth?” to help you decide on a competitive sales price. Other considerations include the condition of your home and how much time do you have.

______________________________________________________________________________

_______________________________________________________________________

§ Assumption: If you find another borrower willing and qualified to take over your mortgage and your home, they may assume your mortgage. The new borrower must meet the lender’s criteria.

___________________________________________________________________________

___________________________________________________________________________

§ Deed in Lieu: In some cases the lender will take back your property instead of holding you responsible for the mortgage loan. This requires investor approval. This option will considered, in most cases, only after the property has been on the market for 90 days. There may be taxes consequences.

______________________________________________________________________________

______________________________________________________________________________

§ Foreclosure: This is sometimes the only option for a borrower to accept. After five years, the borrower may qualify for a new mortgage. There are tax consequences to foreclosure and credit challenges, as well.

______________________________________________________________________________

______________________________________________________________________________

§ Short Sale (preforeclosure sale): When the borrower owes more than the property is worth, it may be best to sell the property. The lender and mortgage insurer must agree to this option.

______________________________________________________________________________

______________________________________________________________________________

§ Bankruptcy – Chapter 13

Please visit the Bankruptcy Court website https://ecf.utb.uscourts.gov/ under Debtor Help or Creditor Help.

Free legal advice is available in most communities. The Utah Legal Services is listed in among the Resources included in this Workbook under the Tools section.

Call 211

for more information. 24

My Notes

Call 211

for more information. 25

TOPIC 5

BEWARE OF SCAMS

BEWARE OF SCAMS

 

Currently known scams include the following. If you suspect a scam that’s not described here, contact Don’t Borrow Trouble® Salt Lake City (call 8662171718) or the Utah Attorney General’s Office (see http://attorneygeneral.utah.gov or call 8002444636) Bailout – includes various schemes where homeowners surrender their title to the house thinking they will be able to remain as renters and buy the house back Bait and Switch – homeowners believe they are signing documents for a new loan to make the mortgage current, but sign away their home and are left holding the mortgage on a home they no longer own.

Equity Stripping – a buyer purchases the home for the amount of the late payments and flips the home for a quick profit Foreclosure Scams – schemes to defraud borrowers who are in default on their mortgage loans by offering to the borrower a program that makes false claims or that otherwise takes advantage of the borrower's default.

Phantom Help – the “rescuer” charges high fees for work the homeowner could do themselves or charges for strong representation that never materializes.

New Scams New scams are always developing. If you suspect an offer is too good, too easy, too expensive, please call a reliable source who will verify this offer is legitimate.

Contact Don’t Borrow Trouble® Salt Lake City at 8662171718 or see the Utah Attorney General’s website at http://attorneygeneral.utah.gov .

Protect yourself by: Never signing over the deed to your home as part of a foreclosure avoidance transaction. A deed should be signed over only if you intend to sell the home for a fair trade.

Consulting an attorney, financial advisor, nonprofit mortgage counseling agency, HUD certified counselor or knowledgeable family member before signing any “rescue” documents; Reading every document carefully. Do not sign contracts or documents that have blank spaces; Making the monthly mortgage payments directly to your original lender. Do not allow another person to make payments on your behalf. Contacting your lender first, when you are getting behind in your mortgage payments. Often a payment plan can be worked out that allows you to keep your home while working through financial problems.

TOPIC 6

 

REBUILDING AFTER FORECLOSURE

Rebuilding after foreclosure is possible especially

with the many resources available in the community.

Families who need help with rent, utilities, and other needs should contact the following agencies.

Information and Referral

Is a program of Utah Food Bank Services, is a free information and referral call center for health, human and community services providing information and referral on topics such as emergency food pantries, rental assistance, public health clinics, child care resources, support groups, legal aid, and a variety  of nonprofit and governmental agencies.

Dial 2–1–1 or 18888269790, www.211UT.org

LEGAL ASSISTANCE

Disability Law Center 8013631347, 18006629080

Landlord/Tenant Mediation Program (CAP) 8013592444

Legal Aid Society (Domestic law) 8013288849

MultiCultural Legal Center 8015967426

Utah Dispute Resolution (Mediation) 8015324841

Utah Legal Services 8013288891

HOUSING ASSISTANCE

American Red Cross Utility Assistance 8013237000

ASSIST Inc Emergency Home Repairs (SL County) 8013557085

Community Development Corporation 8019947222

Housing Services of Utah, Low interest loans 8017856606

Division of Housing & Community Development 8015388666

HEAT Utility Assistance 8015388644

Utah Telephone Assistance Program 8015388793

Weatherization 8015388657

Single Family Housing 8015388636

Housing Authorities of Utah

Bear River AOG/HA 4355868462

Beaver Housing Authority 4354382935

Cedar City Housing Authority 4355868462

Davis Community Housing Authority 8014512587

Emery County Housing Authority 4353812902

Housing Authority of Carbon County 4356375170

Housing Authority of City of Ogden 8016275851

Housing Authority of Salt Lake City 8014872161

Housing Authority of the County of SL 8012844420

Housing Authority of SE Utah 4352595891

Housing Authorities of Utah…continued

Millard County Housing Authority 4358645024

Housing Authority of Uintah Basin 4357814156

Roosevelt City Housing Authority 4357225858

Provo City Housing Authority 8018527080

Tooele County Housing Authority 4358827875

Utah County Housing Authority 8013738333

Miscellaneous

Office of Recovery Services (ORS) (Child support) 8015368500

Utahns Against Hunger 18004533663

Social Security Administration (SSA) (National) 18007721213

Salt Lake Office 8015244115

Unemployment Insurance Center 18888480688

Utah Department of Workforce Services (DWS)

Central Region Eligibility Service Center 8013134600

Customer Relations 18003314341

Worker’s Compensation Fund (WCF) 18004462667

Community Action Programs of Utah

Bear River Assoc of Governments 4357527242

Serving Box Elder, Cache and Rich Counties

Community Action Services and Food Bank 8013738200

Serving Summit, Utah & Wasatch Counties

Southeastern Utah Association of Local Governments 8016377323

Serving Carbon, Emery, Grand & San Juan Counties

Ogden – Weber Community Action Partnership 8013999281

Serving Weber County

Salt Lake Community Action Program 8013592444

Serving Salt Lake & Tooele Counties

Six County Association of Governments 4358969222

Serving Beaver, Iron, Washington, Garfield & Kane Counties

Uintah Basin Association of Governments 4357224518

Serving Daggett, Uintah & Duchesne Counties

Family Connection Center 8017730712

Serving Davis & Morgan Counties

Five County Association of Governments 4356733548

Serving Beaver, Iron, Washington, Garfield Counties

Housing & Financial Counseling

AAA Fair Credit Foundation 18777870727

Cedar City Housing Authority 4355868462

Community Action Service of Provo 8013738200

Community Development Corp of Utah 18669947222

Cornerstone Financial Education 8016215600

Consumer Credit Counseling Service 8004514505

NeigborWorks of Salt Lake City 8015391590

Neighborhood Housing Services of Provo 8013755820

Neighborhood Nonprofit Housing Corp 4357531112

Rural Housing Development Corp 8013752205 ext 102

Salt Lake Community Action Program 8013592444

Utah State University Extension – Salt Lake County 8014683177

Utah State University Extension – Washington Co 4356345706

Utah State University Family Life Center 4357977224

You Community Connection 8013949456

Helpful Organizations & Websites

Housing Education Coalition of Utah (HECU)

The mission is to develop and promote homeownership programs, products and

services for individuals throughout the state of Utah and to insure that all Utah

residents have access to homebuyer education that adheres to a standardized

curriculum and is taught by a nationally certified homebuyer education counselor.

www.hecutah.org

Utah Housing Coalition

The mission of the Utah Housing Coalition is to be the leader in housing issues and to

promote the increase of accessible, affordable housing statewide. 8013640077 www.utahhousing.org

AAA Fair Credit Foundation

a non profit organization providing credit counseling services, financial Education and

debt management services. 8777870727 www.faircredit.org

Better Business Bureau of Utah

An ethical marketplace where buyers and sellers trust each other. 8004563907 www.bbb.org

Utah NAHRO National Association of Housing Redevelopment Officials

The Mission of NAHRO is to enhance the opportunity for every Utahn to acquire affordable, decent, and safe housing in a viable community.

www.utahnahro.org

Utah Legal Services

 

To promote legal services to low income clients and those 60 years of age or older

regardless of income on civil legal matters. 8006624245 www.andjusticeforall.org/uls/

Utah Division of Consumer Protection

State agency on consumer protection 800721safe http://consumerprotection.utah.gov/

Fight Identity Theft

www.fightidentitytheft.com

Utah Division of Occupation and Professional Licensing

The mission of DOPL is to safeguard the public health, safety and welfare and to

enhance commerce through licensing and regulation. 8662753675 http://www.dopl.utah.gov/index.html

Utah Division of Real Estate

The mission of the Utah Division of Real Estate is to protect the public through education, licensure and regulation of real estate, mortgage and appraisal professionals. 8015306747 http://realestate.utah.gov/index.html

Utah Mortgage Lenders Association

Mortgage consumers should be confident knowing that as a UMLA member you will represent them well. Our association admonishes our members to adhere to a higher level of ethics and business practices. Belonging to this association proves you are dedicated to your profession and that you are striving to excel. http://www.umla.org/ 

Utah Housing Corporation

The Utah Housing Corporation provides resources for affordable housing. UHC provides mortgage monies to qualifying first time homebuyers as well as resources to developers building or renovating affordable apartment projects. 8019028200 www.utahhousingcorp.org

Perfect Home Living

Perfect home living Inc is a nonpartisan non profit committed to real estate fraud research and establishing policy that prevents fraud from continuing within the real estate industry. 8015602508 www.perfecthomeliving.com

AARP

American Association of Retired Persons Information on issues affecting individual’s age 50 and older. Special section on housing issues including reverse mortgages and predatory lending. 18664489616 www.aarp.org/states/ut

Department of Housing & Urban Development (HUD)

www.hud.gov Tips for avoiding Foreclosure http://www.hud.gov/foreclosure/

HOPE NOW Alliance

HOPE NOW is an alliance between counselors, servicers, investors, and other mortgage market participants. This alliance will maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible. The members of this alliance recognize that by working together, they will be more effective than by working independently. www.hopenow.com 1888995HOPE HOPE Hotline

Credit Bureaus

A credit bureau gathers information about how consumers use credit. In other words,they collect information from as many consumer financial transactions or inquiries as they can. They then sell access to that combined information to anyone who has a legallyrecognizedreason (permissible purpose).

Experian 18883973742 www.experian.com

Equifax 1800685111 www.equifax.com

TransUnion 18008884213 www.transunion.com

Each year you are eligible for a free credit report from each credit bureau

Department of Veterans Affairs – VA

Specific information for individuals who are veterans of military service. Information on housing, VA loans, medical benefits, VA/Government employment information and special programs for veterans www.va.gov

ID Theft

Identify theft is becoming a huge problem in the United States. Everyone is encouraged to be alert to the use of their social Security Number. The Federal Trade Commission has developed a website to help educate everyone on this growing problem.www.consumer.gov/idtheft

Federal Trade Commission

Consumer information site highlight and reviews of consumer fraud, waste and abuse. www.ftc.gov

United States Rural Development

Rural Development provides information about home loans and grants in rural American. www.rurdev.usda.gov

 

APPENDIX

 

TOOLS FOR THE HOMEOWNER

 

The following documents are usually necessary before you begin to work with a mortgage lender, servicer or housing counselor. Pay Stubs for the last 30 days for each member of the householdAward letter for Social Security/Unemployment/Pension Income

Federal Tax Returns for at least 2 years

Bank Statements (most current 2 months) for all accounts/assets

Statements/bills for all household expenses and Budget

Promissory Note, Deed of Trust/Mortgage

Home Equity Loan/Line of Credit/Judgments/Tax Liens

Any Trustee Sale information from your mortgage company or its attorney

Any documentation from the courts regarding a foreclosure

A hardship letter

A Release of Authorization letter

Truth in Lending (TIL) Form

HUD 1 Settlement/Closing Statement

ALL correspondence, letters (opened and unopened envelopes) from banks, courts or anyone regarding your home or the foreclosure.

 

“Keep On Top” Communication Log

It’s important to keep your documents in order based on your conversations with the mortgage servicer or housing counselor. It’s very important to keep track of all the people working with you including their phone numbers, important dates and action steps. Below is a sample of the kinds of entries to make in your log.

Attached to the log should be all of your documents including letters, loans and notices.

§ Who did I talk to? When?

§ What was discussed?

§ What is their phone number?

§ Their Address?

§ When will they call back?

§ When am I supposed to call back?

§ What notice did I receive and from whom?

SAMPLE NOTES IN KEEP ON TOP LOG

Date Name

Ph. Number

Notes about our conversation

Call Back (CB), Left Message (LM)

01/10/2010 19892436666

Spoke with Katie @ Wilshire who requested a Hardship Letter from me. Fax to her @ 18882220000, then she will CB. If I don’t hear from her by 1/15/2010, I will call her.

1/11/2010 Sent Hardship Letter by Fax to Katie.

1/15/2010 19892436666 LM with Katie to verify she received fax/hardship letter.

1/19/2010 Katie called. Received letter. Now reviewing our file with her manager to decide next step. She will CB next week. Mark calendar to call Katie on 1/26/2010 if she has not called me.

1/27/2010 19892436666 LM for Katie who has not called as promised. Asked her to call back.

1/28/2010 13097777 Marlon from National called to say their company took over our loan and that he will be my new contact. He has our hardship letter and will discuss with his manager next steps and promised to call back on Monday, Feb. 1 st .

KEEP ON TOP COMMUNICATION LOG

Date Name

Ph. Number

Notes about our conversation

Call Back (CB), Left Message (LM)

Release of Authorization Letter

 

Sample

Advising Mortgage Lender or Servicer that a

Housing Counseling Agency will be representing you

Date

Lender’s Name

Lender’s Address

Your Loan Number

Dear Homeownership Preservation/Loss Mitigation Manager,

We the undersigned, hereby authorize _______________ (housing counselling agency) to

act on our behalf in all manners relating to our mortgage loan

______________________________(loan number, original amount) for the property

located at ______________________________________________________ (include the

complete street address, city, state and zip code), including signing of all documents

relating to this matter.

Any and all acts carried out by _________ (housing counselling agency) on our behalf

shall have the same affect as acts of our own.

This authorization is valid until further written notice.

Sincerely,

(Borrower’s name)

Hardship Letter

 

Sample

Date

Lender’s Name

Lender’s Address

Your Loan Number

Dear Homeownership Preservation/Loss Mitigation Manager,

Our names are/My name is _______ and I’ve/we’ve been paying the mortgage on our

home at [Address] for ___ years now. I’m/We’re writing to you to explain why I/we

have unfortunately fallen behind on our monthly payments.

Explain your Hardship (Include dates and specific incidents that caused you to get

behind, also explain how it has been resolved).

We/I have sat down with my/our family and taken a very hard look at our financial

situation and we all have agreed to make the following sacrifices in order to make

certain that this situation never happens again.

Explain what steps you have taken to correct your Financial Position (cut back on

spending, canceled some things… cable, eliminated activities, met with Credit

Counseling services).

My family and I are truly grateful for the opportunity that you’ve given us to own our

home and have every intention of keeping it for a long while, as well as making timely

mortgage payments to you for it. Our children will grow up here and we hope that our

grandchildren will also.

Thank you again for your time. We truly hope that you will consider working with us

and are anxious to get this settled so we can move on.

Sincerely,

Ask everyone in your family sign the letter.

 

AUTHORIZATION TO RELEASE INFORMATION

<<<Agency Name>>>

FORECLOSURE COUNSELING PROGRAM

I/We hereby authorize and direct any Federal, State or local agency, organization, business or individual to release to Agency Name its employees, agents or assigns (hereinafter collectively referred to as “ABC”) to release/exchange any information or materials requested in order to facilitate my participation in ABC’s Foreclosure Counseling Program. I agree that a photocopy of this may also serve as authorization.

The groups or individuals that may be asked to release the above information includes but is not limited to:

· Mortgage companies

· Past and present employers

· Support and alimony administrators

· Social Security Administration

· Veterans Administration

· State unemployment agencies

· Utility companies

· Banks & financial institutions

· Nonprofit

organizations

I/We further authorize ABC to order a consumer credit report as part of the Foreclosure Counseling Program.

I/We also authorize ABC to exchange information with all pertinent parties in order to assist me with the best plan to resolve my immediate situation. I authorize the exchange of information with any party authorized in this release to include but not be limited to in person, via phone, via fax and via email.

This authorization will stay in effect until I complete my participation in the Foreclosure Counseling Program or revoke this authorization in writing.

_______________________ _____________________________ ____________

Name (please print) Signature Date

_______________________ _____________________________ ____________

Name (please print) Signature Date

_________________________________ ___________________________________

Address City/State/Zip

 

COUNSELOR & HOMEOWNER AGREEMENT

<<<Agency Name>>>

FORECLOSURE COUNSELING PROGRAM

Organization and its counselors (counselor) agree to provide professional foreclosure counseling services to Homeowner(s) (you).

What to expect

The counselor will help you:

· Understand the foreclosure process so that you know what to expect and when;

· Explore options available to you for preventing foreclosure.

Counselors are not able to prevent foreclosure in every situation but are committed to working with you so you can make the best decisions possible.

The counselor will work with you to understand:

· The amount and cause of the mortgage default;

· Your income and expenses by developing a spending plan;

· Solutions to the cause of default and adjustments to your spending plan, as needed;

· Your mortgage product and communicate with your mortgage company;

· Available options for preventing foreclosure including the pros and cons of each.

Together with the counselor you will develop an action plan with steps for both you and the counselor.

Counselor Commitment

The counselor agrees to:

· Provide you with factual information;

· Complete action plan steps in a timely manner;

· Make referrals to needed resources;

· Provide services confidentially, honestly and respectfully.

Homeowner Commitment

You understand that in order for the counselor to provide you with the best service possible, you

agree to:

· Provide honest and complete information.

· Provide all necessary documentation and complete action plan steps within the timeframe requested.

· Notify the counselor immediately, preferably 6 hours before a scheduled appointment, if you will be unable to attend an appointment.

· Arrive on time for appointments. You understand that if you are late for an appointment,

the appointment will still end at the scheduled time and the counselor may need to reschedule.

· Contact the counselor about any changes in your situation immediately.

 

COUNSELOR & HOMEOWNER AGREEMENT

<<<Agency Name>>>

FORECLOSURE COUNSELING PROGRAM

Organization and its counselors (counselor) agree to provide professional

foreclosure counseling services to Homeowner(s) (you).

Signatures

______________________________________________ ________________________

Homeowner Date

______________________________________________ ________________________

Homeowner Date

______________________________________________ ________________________

Counselor Date

______________________________________________ ________________________

Counselor Date

 

Know Your Lingo

Amortization – the gradual repayment of a mortgage loan with equal periodic payments of both principal and interest calculated to retire the obligation at the end of a fixed period of time Annual Percentage Rate – the cost of your loan expressed as a yearly rate. Mortgages include interest, points, origination fees, and any mortgage insurance required by the lender

Collections – the process of contacting the homeowner for and receiving delinquent amounts which are owed DeedinLieu of Foreclosure – the lender must agree that the homeowner can voluntarily sign the deed over to the lender to avoid the foreclosure process. The homeowner is required to vacate the property at the time the documents are signed or at another negotiated date.

DebttoIncome

Ratio – maximum percent of gross monthly income that can be used for the house payment plus all other debts

Delinquency – failing to make a timely payment so that it is received on or after the due date

Escrow Account – an account held by a lender for payments of taxes, insurance, or other periodic debts against real property. Part of the borrower's monthly payment goes into this account so funds will be available to pay the taxes, insurance and other impounded matters when due to avoid the need for the borrower to pay a lump sum payment.

Foreclosure – legal action for force the sale of a home (Repossession)

Grace Period lengthof time between the due date and the date when late fees begin

Good Faith Estimate – A written estimate of costs & fees expected for a mortgage loan.

Housing Ratio – maximum percent of gross monthly income that can be used for a monthly mortgage payment.

Housing Counseling Agency – Nonprofit mortgage lending experts who help you prepare for homeownership or work out a solution to save your home from foreclosure.

Interest Rate – the percentage of a sum of money charged for its use

Insurer – insures the lender/investor in case the loan becomes delinquent

Investor – the owner of the loan

Loan Modification – changing one or more terms of the original mortgage agreement, usually: a) delinquent payments and other costs may be added to the loan balance, b)interest rate changes and/or c) length/term of the mortgage changes, thus resulting in a lower payment amount.

LoantoValue

Ratio – the comparison of the amount of the loan to the value or selling price of real property expressed as a percentage. For example, if a home with a $100,000 value has an $80,000 mortgage on it, the loan to value is 80%.

Loss Mitigation – working with the customer to find a permanent solution to resolve the delinquency (Homeownership Preservation)

Mortgage Insurance A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price.

Mortgage Lender – The company who provided you the funds to buy your home based on a repayment plan including monthly interest and principal.

Partial Claim – applies to FHA loans only; HUD advances insurance funds to pay pastdue amounts without charging interest, and is repaid when the mortgage is paid in full– either through refinancing or sale of the property

Rate Lockin – holds a rate for a specific period of time. Get it in writing (a loan commitment) – in Arizona a mortgage banker will do it. Mortgage brokers will do it too for an added fee. Ask to see a license.

Repayment Plan – regular monthly payments plus additional amounts as agreed; payments are made until the loan is current

Mortgage Servicer – A mortgage lender may sell your mortgage loan to a company responsible for customer service, processing payments, and working with delinquent payments.

Short Sale – the sale of the property at fair market value; the lender agrees to accept the proceeds of the sale even though it is less than the full payoff amount in order to avoid foreclosure, and may result in additional taxes

Special Forbearance Plan – a signed agreement that allows the reduction or suspension of a homeowner’s monthly payments for a specific period of time. This requires regularmonthly payments plus additional amounts as agreed, until the loan is current.

Homeowner Information Sheet

Homeowner (A)

Homeowner (B)

Homeowner (A) Street Address City State Zip Code

Homeowner (B) Street Address City State Zip Code

Property Address (if different) City State Zip Code

Home Phone (A) Home Phone (B)

Work Phone (A) Work Phone (B)

Cell Phone (A) Cell Phone (B)

Email Address (A)

Email Address (B)

Homeowner (A) SSN Homeowner (B) SSN

Homeowner (A) DOB Homeowner (B) DOB

Homeowner (A) Employer 1

Title How Long?

Homeowner (A) Employer 2

Title How Long?

Homeowner (B) Employer 1

Title How Long?

Homeowner (B) Employer 2

Title How Long?

What‛s My House Worth?

Type of PropertySingle Family detached Unit (duplex) TownhouseCondominium Manufactured Home Other

Condition of Home

Excellent Good Fair Poor

Age of Home: Date Purchased:

Describe Improvements you’ve made:

For Sale?Yes No

List Price:$ How long for sale?

Real Estate Agent: Telephone:

Real Estate Broker: Telephone:

Help in determining the current value of your home:

Beaver County Assessor’s Office

Website: http://www.beaver.state.ut.us/assessor.htm Telephone: 4354386463

Box Elder County Assessors Office

Website: http://www.boxeldercounty.org/ Telephone: 4357343333

Cache County Assessor’s Office

Website: http://www.cachecounty.org/assessor.php Telephone: 4357551590

Carbon County Assessor’s Office

Website: http://www.carbon.utah.gov/assessor/index.htm Telephone: 43563632

 

Daggett County Assessor’s Office

Website: http://www.daggettcounty.org/Directory.asp?did=6 Telephone: 4357843222

Davis County Assessor’s Office

Website: http://www.daviscountyutah.gov/assessor/default.cfm Telephone: 8014513250

Duchesne County Assessor’s Office

Website: http://www.duchesnegov.net/assessor/assesor.html Telephone: 4357381110

Emery County Assessor’s Office

Website: http://www.emerycounty.com/Assessor/contact.htm Telephone: 4353812474

Garfield County Assessor’s Office

Website: Telephone: 4356761108

Grand County Assessor’s Office

Website: http://www.grandcountyutah.net/assessor.htm Telephone: 4352591327

Iron County Assessor’s Office

Website: http://www.ironcounty.net/departments/Assessor/ Telephone: 4354778311

Juab County Assessor’s Office

Website: http://www.co.juab.ut.us/County/Assessor/Index.html Telephone: 4356233425

Kane County Assessor’s Office

Website: http://kane.utah.gov/deptinfo.cfm?deptID=4 Telephone: 4356442647

Millard County Assessor’s Office

Website: http://www.millardcounty.org Telephone: 4357435719

Morgan County Assessor’s Office

Website: http://www.morgancounty.net/Telephone: 8018454000

Piute County Assessor’s Office

Website: http://www.piute.org/Goverment.htm Telephone: 4355772988

Rich County Assessor’s Office

Website: http://www.richcountyut.org/officers.htm Telephone: 4357935215

Salt Lake County Assessor’s Office

Website: http://www.assessor.slco.org/cfml/Query/query2.cfm Telephone: 8014683050

Sanpete County Assessor’s Office

Website: http://sanpetecounty.org/pages/assessor Telephone: 4358352111

San Juan County Assessor’s Office

Website: http://www.sanjuancounty.org/assessor.htm Telephone: 4355873221

Sevier County Assessor’s Office

Website: http://www.sevierutah.net/assessor/assessor.html Telephone: 4358930431

Summit County Assessor’s Office

Website: http://www.summitcounty.org/assessor/Telephone: 4353363248

Toole County Assessor’s Office

Website: http://www.co.tooele.ut.us/assessor.htm Telephone: 4358433110

Uintah County Assessor’s Office

Website: http://www.co.uintah.ut.us/assessor/aso.php Telephone: 4357815323

Utah County Assessor’s Office

Website: http://www.co.utah.ut.us/Dept/Assess/Index.aspTelephone: 8018518244

Wasatch County Assessor’s Office

Website: http://www.co.wasatch.ut.us/d/assessor.html Telephone: 4356573181

 Washington County Assessor’s Office

Website: http://www.washco.utah.gov/departments.php?whichDept=1 Telephone: 4356345703

Wayne County Assessor’s Office

Website: http://www.waynecnty.com/Assessor.html Telephone: 4358361305

Weber County Assessor’s Office

Website: http://www.co.weber.ut.us/assessor/contact.php Telephone: 8013998572

www.Zillow.com – Website listing the value of homes recently sold and currently for sal

 

Disclaimer

Unless otherwise specifically stated, the information contained herein is made available to the public by the Don’t Borrow Trouble® Pima County and the Utah Housing Coalition for use as an example of the kinds of documents and advice one may receive in the process of negotiating with a mortgage company, housing counseling agency or any other party involved in the delinquency or foreclosure of one’s home. The intent of the workbook is to assist individuals in resolving their foreclosure crisis.

Neither Don’t Borrow Trouble® Pima County, the Utah Housing Coalition nor any other agency or entities involved in the development of this workbook, assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of anyinformation, product or process disclosed in these examples.

Reference herein to any specific commercial product, process, service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement,recommendation, or favoring by the Don’t Borrow Trouble® Pima County, the Utah Housing Coalition or any entities thereof.

The views and opinions of the originators expressed therein do not necessarily state or reflect those of the Don’t Borrow Trouble® Pima County, the Utah Housing Coalition or any agency or entities thereof.

 

Utah Foreclosure Prevention Taskforce 2008

It became apparent when the Housing Education Coalition of Utah (HECU) was working on their mission of becoming united using the same curriculum statewide;foreclosures in Utah needed to be looked at. A work group was established and it became apparent the need to form a Taskforce to get ahead of the situation. Many statesdid not get on board early enough to address the issue of foreclosures. Utah seems to be behind the curve on many national trends and we are thankful to learn from other states.

Participating Agencies

AAA Fair Credit Foundation

American Express Center for Community Development

CHASE

Community Development Corporation of Utah

Community Development, FRBSF

Cornerstone Financial Education

Federal Reserve Bank of S.F.

Housing Urban Development (HUD)

Morgan Stanley Bank

Neighborhood Nonprofit Corporation

NeighborWorks Salt Lake

Perfect Home Living

Pitney Bowes

Provo Community Action Services

Olene Walker Housing Loan Fund

Rural Community Assistance Corporation

Salt Lake Board of Real Estate Agents

Salt Lake City Housing & Neighborhood Development

UBS Bank

Utah, Division of Housing and Community Development

Utah Homebuyer Education Coalition

Utah Housing Coalition

Utah Housing Corporation

Utah Mortgage Lenders Association

Utah State University Extension

U of U, Bureau of Business and Economic Business Research

Wells Fargo Bank

Western Region Homeownership Preservation, Chase

Your Community Connection

 

for more information.

Utah Real Estate and Utah Home Search!