Is now a good time to buy?

August 29, 2008
August 29, 2008

The Boston Globe published this article a couple of days ago.  I think it’s a solid starting point for people who are contemplating the purchase of a home, but have reservations given the state of the housing market. Though the mortgage crisis has created opportunities for buyers, it has also made people gravely aware of the consequences one risks if they get wrapped up in a bad situation.This article gives the potential homebuyer clear-cut advice to know where to begin and how to be proactive against future mortgage woes.

Non-profit organizations I’ve mentioned before, such as Urban League and Beyond Housing, offer pre-purchase counseling, which can offer more perspective into the housing market as it relates to local neighborhoods.


Share your tips and stories through KETC’s mortgage line

August 27, 2008
August 27, 2008

If you’ve got a tip or experience that you’d like to share with our community, call KETC’s mortgage crisis line at (314) 512-9192 and leave a message.

Patrick Murphy explains how your stories could help our community:


Legal resources for Missouri and Illinois residents

August 25, 2008
August 25, 2008

Since St. Louis Beacon ran this article last week about the legal process in Missouri foreclosures, I wanted to expand on those resources and also provide some information about the process in Illinois.

In Illinois

Because the foreclosure process has to go through the court system, Illinois foreclosures usually take about a year. Land of Lincoln Legal Services recommended I look at the guide on www.illinoislegalaid.org. It explains the Illinois foreclosure process very clearly. You can read it here. There are links to some non-profit legal organizations at the bottom of the page, too.

This is another guide published by Illinois Legal Aid that gives more detailed answers to those being sued for mortgage foreclosure.

In Missouri:

After Texas, Missouri has the fastest foreclosure process in the United States. I’ve read articles that say it happens in 60 days and others that say 21. To clarify, I spoke with Dan Claggett of Legal Services of Eastern Missouri. Here’s a breakdown of what he told me:

When a homeowner misses 3 mortgage payments, the lender sends them a notice of default with a foreclosure date listed.

The lender has to publish the sale of the home at least 20 times before the sale date. So if a lender wants to move rapidly, they could publish a notice per day for 20 days leading up to the sale and the home could be sold on that 21st day. Bare minimum, the process can occur in 21 days from the time the lender mails the foreclosure notice.

What is more troubling is that the lender only has to send that one letter, and they need only drop it in the mail 20 days before the sale date. That doesn’t mean the homeowner receives it before then. If the mail is delayed for any reason, the borrower could be looking at a sale date within a week or two of when they get that letter.

Claggett adds that it becomes much harder to work out a plan with the lender if they’ve already mailed the foreclosure notice due to the money they’ve spent on legal counsel and publishing.

Here is a 2 minute video of Dan Claggett discussing the Missouri foreclosure process on KETC’s Facing the Mortgage Crisis live special:

Find more legal resources at the St. Louis Fed’s Foreclosure Resource Center.


Top 3 mortgage scams and how to protect yourself

August 21, 2008
August 21, 2008

This article from MSN real estate is a good place to start finding out about the different mortgage scams going on. Here are some key points I took away from it:

The top 3 mortgage scams

1. Equity stripping/bailout– In this situation, the scammer buys someone’s house from them before it is foreclosed upon. They offer to rent the house to the person until they can afford to buy it back, which leads to the homeowner signing the deed over to the scammer, who has no intention of selling the house back–instead they make it impossible for the homeowner to keep up with rent, evict them, sell it off and pocket the profits.

What you can do:

 Be suspicious of anyone promising to “save your credit” or buy your home “as is”. If it sounds too good to be true, it likely is.

-Don’t modify or sign away the deed to your home without consulting a lawyer you trust.

-If selling your home, be sure that you are released from all liability for your mortgage. Know your rights specific to your state.

2. Phantom Help-A homeowner falls behind on their mortgage and is facing foreclosure. A person or company offers to help save the home, and the homeowner pays them up front for their “services”, which are little more than making phone calls and filling out forms the person really could have handled themselves. Homeowners pay a lot up front for “big results”, but before they know it (especially in Missouri), they’re out thousands of dollars and the home is lost.

What you can do:

-Call your lender immediately and discuss the situation with the loss mitigation department.

-Find a FREE housing counselor from one of the many resources listed on KETC’s site. You should NEVER pay someone for foreclosure help.

-Be suspicious of door-to-door advertising, flyers and of terms like “foreclosure service” or “mortgage consultant”. These services usually come with a price tag and a big loss.

3. Bait and switch-In this type of scam, the homeowner is tricked into signing over the deed to their house without even realizing it. Scammers pretend to be housing counselors or real estate brokers. They act the part and have very official looking documents for the homeowner to sign and initial to save their home. However, those official documents, written in a language that might confuse even the savviest homeowner, actually turn the house over to a 3rd party. Even if a person doesn’t sign the document giving the home away, scammers are known to successfully forge the person’s signature.

What you can do:

-Read everything carefully with a trusted lawyer present.

-Don’t sign anything with blank spaces. The scammer could add information in later.

-Get everything in writing. Don’t make verbal agreements.

-Do not get pressured into signing anything.

-Again, if it seems too good to be true, it likely is.

An important thing to remember is that anyone can be victimized. We’ve all been scammed at some point in our lives and it’s embarrassing because, in hindsight, you should have known better. For me, it was the time I gave $40 to a stranger because he had me convinced he lived across the street from me and needed money for a locksmith. He even knew which apartment I lived in (scary) and said he’d slip the money back through my mail slot. Of course you know how that story ends. Am I that stupid? No. Am I that trusting? When someone is that convincing (down to knowing the names of my neighbors), yes. 

These mortgage scam victims aren’t getting into trouble because they don’t know any better. Con-artists make a living by getting people to trust them, and in a desparate situation it’s easy to trust someone who looks like they have a clue.

Whatever the circumstances, if you’ve been scammed it’s important that you talk to someone about it. Call your bank, your lender, or a HUD-certified housing counselor. Not only could you help your own situation, you could educate someone else before it’s too late for them.

You can find even more information on this page of tips to avoid becoming a victim of mortgage fraud, recently published by the FBI.

Watch KETC’s videos about mortgage scams:


888-995-HOPE offers free counseling by phone and…chat room?

August 20, 2008
August 20, 2008

After reading St. Louis Beacon’s latest mortgage crisis article, I surfed around the St. Louis Fed site to look into their foreclosure resources. Both the Fed and NeighborWorks refer homeowners to (888)-995-HOPE, a foreclosure help line run by the Homeownership Preservation Foundation.

Linda Ingram mentioned last week to me that she sometimes sends clients to this HOPE line, and has a lot of faith in the service. When I looked them up, I found a blog post near the top of the search results that criticized them for not helping people who aren’t actually in foreclosure.  I’d like to set the record straight that this is not true.

I called (888)-995-HOPE this afternoon and was immediately connected to someone who wanted to put me in touch with the next available housing counselor. I asked if there was help available to me if I wasn’t in foreclosure yet. What if I’d lost my job or my rate adjusted and I feared I’d fall behind in the next month or two? “It’s always good to be proactive and we’ve got plenty of people who can help you,” she told me.

Another service offered through them that I’ve not seen anywhere else is the option to chat online with a housing counselor. Though I believe it’s most effective to visit a counselor in person, this could still be a useful service–especially to those who can’t take time off work for an appointment. You can use the online chat feature to simply ask a few questions or to do an all-out counseling session.

 I think this could also benefit night owls such as myself. Personally, I do the most worrying (and occasionally some problem solving) between 1:00 and 3:00 a.m., usually because I forgot to make the car payment or I can’t figure out why my credit card interest rate keeps going up. I can’t exactly call these places on the phone so late, so I’d likely take full advantage of the option to get online and ask a professional what to do.  The online foreclosure chat is a new concept to me, but it may be yet another valuable free resource.

To learn more about the HOPE line or the online chat feature, visit www.995hope.org.


Federal Reserve Bank of St. Louis launches website to help homeowners

August 19, 2008
August 19, 2008

Here’s the latest from the St. Louis Beacon:

By Mary Delach Leonard
 
A new online “Foreclosure Resource Center” launched by the Federal Reserve Bank of St. Louis is aimed at financially troubled homeowners, but it also offers useful consumer advice for people who aren’t in danger of losing their homes.

For example, a link titled “You May Be Paying Too Much for Your Mortgage” offers four scenarios that could prompt a borrower with a good credit history to refinance or shop around for a better deal on a loan. A section on bank-related complaints includes directions for filing complaints against financial institutions and answers to commonly asked questions about credit and loans.

The online help center can be accessed through the Fed’s website.  Click on the top box on the right side of the homepage, and you will be directed to the site that includes a roundup of mortgage industry-related news and research published by Fed economists.

Homeowners worried about foreclosure will find links to local housing counselors and agencies approved by the Department of Housing and Urban Development, as well as suggestions for seeking help.

Help for neighborhoods
The St. Louis Federal Reserve Bank is hosting a symposium Sept. 24-25 for communities dealing with the negative impact of the foreclosure crisis.

The session titled “Strengthening Neighborhoods in Weak Markets” is aimed at helping policymakers, municipal officials, lenders and community agencies stem the tide of boarded-up houses and declining property values. The public is welcome to attend, but reservations are required. For information, call Cynthia Davis at 314-444-8761, or email communitydevelopment@stls.frb.org This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .


Mortgage Scams – Living St. Louis Video

August 19, 2008
August 19, 2008

Living St. Louis Producer Ruth Ezell continues telling the story of the mortgage crisis in St. Louis. Carlos Brooks used to own the Grand View Market on North Market Street. He received an equity loan and shortly after, he fell ill and went into the nursing home. During that period, burglars ransacked his property. Brooks filed for bankruptcy and sold everything he owned for a fraction of its value without seeking legal advice. The FBI says that there are various different types of mortgage scams out there and to be aware of unsolicited offers of assistance.