The Fed's New Plan to Help Struggling Homeowners: Do You Qualify for Help?

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore

On March 4, 2009 the Federal Government announced a plan to help struggling homeowners stay in their homes and avoid foreclosure. There is a lot stuff floating around out there about the guidelines and rules of the legislation, as well as who is eligible for help and who isn't.

As a homeowner, you need to know there are two facets to this legislation. 1.)The Home Affordable Refinance and 2.) The Home Affordable Modification. These were put in place to help homeowners who are either under water with their mortgages (their mortgage is worth more than the property), or who were victims of predatory lending and ended up with a bad loan with re-adjustable arms.

Eligibility (as laid out by the U.S. Department of the Treasury's Summary of Guidelines)

- loan was originated on or before January 1, 2009
- first-lien loans on owner-occupied properties with unpaid principal balance up to $729,750
- higher limits allowed for owner-occupied properties with 2-4 units
-all borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs, most recent tax return, and must sign an affidavit of financial hardship
- property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties
-incentives to lenders and servicers to modify at risk borrowers who have not yet missed payments, when the servicer determines that the borrower is at imminent risk of default
-modifications can start from now until December 31, 2012; loans can be modified only once under the program

NHS of Baltimore in the News for Foreclosure Prevention

Visit the link below to read the story.

http://www.abc2news.com/news/local/story/Avoid-Foreclosure-Scams/V86e-TzRMkyk0QSluMSS9w.cspx?rss=702

How to Avoid Foreclosure Rescue Scams

NeighborWorks America, of which NHS of Baltimore is a chartered member, offers these quick tips to avoid foreclosure rescue scams.

1. When you need help with a possible foreclosure on your home, don’t hesitate to contact your local NeighborWorks organization or other HUD-approved nonprofit housing counseling agency for free foreclosure counseling. To find a local NeighborWorks organization near you, visit www.nw.org.

2. If you feel more comfortable speaking to a counselor over the phone, call the Homeowner’s HOPE Hotline at 888-995-HOPE for free foreclosure prevention counseling by expert counselors at HUD-approved nonprofit counseling agencies. The hotline is open 24 hours a day, seven days a week.

3. Suspect any ad, person, or company that approaches you and claims to be able to “stop foreclosure now” for a fee.

4. Never release your financial information online or over the phone to a company you know nothing about.

5. Contact your mortgage lender. Contrary to what a foreclosure scammer will tell you, you should contact your lender the minute you have trouble making your monthly payment.

NHS of Baltimore Supports Federal Efforts to Prevent Foreclosure

Today new details of the Obama administration’s plan to prevent foreclosure and stabilize communities were announced and NHS of Baltimore is committing its full support to the plan’s scope and strategy. Details of the plan clearly demonstrate the Administration’s focus on supporting foreclosure prevention and neighborhood stabilization initiatives that will help the largest number of homeowners.

“This is a promising step forward for millions of homeowners who are worried about losing their homes,” said Felix Torres Colon, NHS of Baltimore Executive Director, “The programs detailed today give hope and important guidance to millions of homeowners who thought that the only solution to their mortgage trouble was foreclosure. Foreclosure doesn’t have to happen.”

NHS of Baltimore and other HUD certified counseling organizations – important parts of the President’s foreclosure prevention plan -- stand ready to do their part to help qualified homeowners prepare to talk to their lender and to take full advantage of the bold plan announced by the Obama administration.

Long-Term Loan Modifications

In addition to low-cost refinancing and lower mortgage interest rates, the President's plan gets out in front of the foreclosure problem and creates a standard for loan modification. NHS of Baltimore is pleased to see modifications completed under the Homeowner Affordability and Stability Plan must be in place for at least five years, and that under the plan, a homeowner’s mortgage debt-to-income ratio will be brought down to 31 percent. However, we maintain that in order to achieve sustainable homeownership, loan modifications must be sustainable over the course of the loan.

The Importance of Nonprofit Foreclosure Intervention Counseling

Community-based foreclosure intervention counseling provided by nonprofit certified counselors is a critical part of the foreclosure prevention process. Nonprofit counselors help homeowners understand their options and the steps they can take to stay in their homes.

NHSB Gives Testimony to City Council

Letter to the Taxation, Finance and Economic Development Committee
Organization: Neighborhood Housing Services of Baltimore
Testimony for Bill # CC 08-0037R
Written By: Alicia Schuller and Tanya Washington
January 22, 2009

History and Approach
Neighborhood Housing Services of Baltimore is a non-profit housing organization that has fought to provide access to the American dream of homeownership since its inception. Our mission to create and sustain homeownership opportunities through customized lending and consumer education insures successful homeownership.


Preventing Foreclosure as Apart of Our Mission
In July of 2007 we incorporated foreclosure prevention as a business line because we recognized the vast need for the service and the relevance foreclosure has to sustaining homeownership, a key part of our mission. We currently offer an emergency bridge loan of up to $5,000, which is meant to bridge the gap and buy time for the homeowner, while we refinance them into a lower rate or modify their loan with their bank.

Recent Trends in Clientele
The homeowners seeking our services are most commonly victims of sub-prime and exotic mortgages, such as 80/20 rate loans. Additionally, catastrophic life events including job loss, illness, death of a spouse, and simple over-extension of the borrower’s financial responsibilities have been the root cause of delinquencies we have seen. The core demographic of clients reaching out for our services is African American, single parent, head-of-household, women.

We currently maintain a waiting list of over 500 people who are in need of our foreclosure prevention services, however about half of those have failed to return required materials to move forward on their cases. Since July of 2007 NHS of Baltimore has counseled more than 170 families and individuals facing mortgage delinquencies and foreclosure. However, due to funding constraints, we have only been able to provide 39 households with the Emergency Bridge Loan. The demand for the loan has been so high that NHS of Baltimore depleted allocated monies for it by the December of 2008. We are currently exploring more funding options as the demand continues to be high.

It is imperative that state and federal officials recognize the large need for foreclosure prevention programs such as our own to insure that they continue to receive ample funding. The foreclosure and economic crisis is far from over, but it is clear that successful homeownership is not only key to making sustaining vibrant Baltimore neighborhoods, but in maintaining a strong and healthy economy.
Thank you,
Neighborhood Housing Services of Baltimore

5 Essentials to Winterizing Your Home

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore

While there are many things you can do to winterize your home, NHS of Baltimore offers these 5 essential tips that will save you money and maximize your comfort during the winter season.

Insulate Your Attic:
Making sure your attic is properly and tightly insulated will trap more heat in the home and prevent it from escaping through the roof. Be sure your insulation is at least 12 inches thick.

Test and Inspect Your Furnace and Heating System:
Be sure to fire up your furnace at least once before Jack Frost pays a visit, to ensure it is working properly. Also, if you have central heating, have an inspector come to your home at least once a year to ensure that the ductwork is secure and firmly insulated.

Secure Your Windows:
Installing your storm windows when the temperatures begin to fall is an easy way to insulate your home. Replacing old and outdated windows is also important although it can be quite costly. If money is tight try budgeting to pay for a couple windows at a time.

Seal Leaky Areas:
Pinpoint the trouble areas in your home where you can feel drafts coming through. Door and window frames can be caulked easily and should be sealed on both the interior and exterior of your home. Use a door sweep underneath the opening of your door id air is entering through.

Clean Your Gutters:
Too much debris in your gutters when winter comes can cause major issues. It can clog drainage and prevent melting snow from running off properly and away from your home. Instead, it can back up and seep into the home causes water damage and others problems.

NHS of Baltimore offers low-interest, deferrable loans for housing rehab and maintenance to help pay for housing essentials such as new heating, new windows, new roofing and lots more.

NHS of Baltimore Helping People Avoid Foreclosure

By: Rena Somar, Homeownership Adviser, NHS of Baltimore

I am currently working with a client who called me on November 5th to help her with her mortgage. Her home was in foreclosure and scheduled to be sold on November 13th. I called her lender to work out some type of modification but they were not willing to work with her until she paid the legal fees. My client does not have an income because she is disabled and does not work. She is currently waiting on her disability check, which is backdated from 2006 due to a legal battle over pre-approval of her disability. Although she has since been approved, she will not receive her check for at least another month.

I called the Department of Housing and Community Development on November 6th and spoke with Jeanne Mullen, Manager of Single Family Collections, who asked me for certain documents, including written authorization from my client, giving me permission to work on her behalf. On November 7th I received a call from Gary Masseaux, Asset Management Officer of DHCD Delinquency Reports, who informed me that my client’s foreclosure sale date was stopped and they have given her 60 to 90 days to bring her mortgage current. This will give her enough time to receive her disability money and pay her mortgage in full.

Real Estate Market Still Safe in Some Places

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore
An article in Yahoo! today explained there are six places in the United States where the real estate markets continue to thrive and steadily grow. The lucky ones include:
1. Lancaster, PA.
2. Clarksville, TN.
3. Albuquerque, NM.
4. Burlington, VT.
5. Johnson City, TN.
6. Washington, D.C.
Read the full story for details on why these cities are weathering the storm…

NHS of Baltimore Offering Free Income Tax Preparation

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore

Neighborhood Housing Services of Baltimore is pleased to announce we are offering free income tax preparation, during the upcoming season, for taxpayers making less than $42,000 a year. Services will begin in January and will be offered Tuesdays and Thursdays from 4:30pm-8:30pm, as well as Saturdays from 10:00am-5:00pm. Customers will have their taxes prepared by highly trained, well qualified volunteers. Spanish speaking accommodations are available Thursdays and Saturdays by appointment. This program will be made possible by NHS of Baltimore, the Baltimore Cash Campaign and the Volunteer Income Tax Assistance program (VITA). Call NHS of Baltimore and schedule an appointment today- 410-327-1200 Ext. 160. Or visit our website. VITA-- Volunteer Income Tax Assistance

$7,500 Homebuyer Tax Credit Needs Reworking

By: Alicia Schuller, Marketing Coordinator, NHS of Baltimore

It’s no secret. The economic downturn facing the United States right now was triggered by carelessness in the mortgage lending markets. Congress recognized the need for immediate action earlier this summer when they passed the Housing and Economic Recovery, which among many things, offered a $7,500 dollar tax credit to first time homebuyers as a way to stimulate home sales. The question now is-- is it working?

According to an article released last week by the Washington Post, very few first time homeowners have taken advantage of Congress’ tax credit. The largest reason-- the credit essentially amounts to a zero interest, federal loan. Given the current state of the economic crisis, potential homebuyers are extremely weary of loading on more debt.

This is not a good sign for an economy that is in desperate need of pumping up the housing market before it will see an end to the financial mess. Congress is now considering a second rescue bill to shore up the rescue package passed in early October. In addition to more federal oversight and assistance for businesses, the bill would include even more money for homebuyers, upwards of $12,000. However, it is still unclear whether a repayment provision will be included. Many argue this summer's housing bill provided enough money, but needs to be reworked to exclude the repayment requirement.

Cheryl Cassell, our own Assistant Director of Single Family Programs believes the best remedy for the housing market is a tax incentive that does not include a payback provision. “Housing tax credits can be a “hit or miss” in stimulating the housing market. The most recent tax credit proved not to be attractive because of the [the repayment component]. Historically, first time homebuyers generally do not have sufficient savings for a significant down payment. As such, instead of a tax credit with a repayment stipulation; a down payment credit or down payment assistance program would be more effective in stimulating the housing market.”