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

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

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.

past due payment.

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

where you will have more options available to you.

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.

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

counselor.

mortgage servicer.

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.

Eating out:____________________________________________________________________

Gambling:____________________________________________________________________

Luxuries:_____________________________________________________________________

Cable TV:_____________________________________________________________________

Cell phone:___________________________________________________________________

Other:________________________________________________________________________

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.

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

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.

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

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 .

Required by Federal law.

Purpose of TIL:

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:

ARMs

ARMs

Options not involving lender:

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Options working with your Lender depend on factors:

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

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.

______________________________________________________________________________

_______________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

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.

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.

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.

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

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

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

Bear River Assoc of Governments 4357527242

Community Action Services and Food Bank 8013738200

Southeastern Utah Association of Local Governments 8016377323

Ogden – Weber Community Action Partnership 8013999281

Salt Lake Community Action Program 8013592444

Six County Association of Governments 4358969222

Uintah Basin Association of Governments 4357224518

Family Connection Center 8017730712

Five County Association of Governments 4356733548

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

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

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.

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

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

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

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

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

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

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.

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,

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.

shall have the same affect as acts of our own.

This authorization is valid until further written notice.

Sincerely,

(Borrower’s name)

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.

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:

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

The counselor will help you:

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:

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

The counselor agrees to:

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

agree to:

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

______________________________________________ ________________________

Homeowner Date

______________________________________________ ________________________

Homeowner Date

______________________________________________ ________________________

Counselor Date

______________________________________________ ________________________

Counselor Date

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

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.

Condition of Home

Age of Home: Date Purchased:

Describe Improvements you’ve made:

List Price:$ How long for sale?

Real Estate Agent: Telephone:

Real Estate Broker: Telephone:

Website: Telephone: 4356761108

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.

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.