National Black Church Initiative is a subsidiary
of the DC Black Church Initiative
Checklist on Assessing Your Current Situation
Not knowing what the future holds and whether you will be able to maintain your home can give you reason to panic. Get as much information as you can while you are still in control of the situation; i.e., before you ever miss a mortgage payment. The more you know the calmer and more responsive you can be. In addition, the sooner you act the more options you have. Follow these steps:
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Make a budget.
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Meet with your lender to review your loan agreement and to determine
the nature, terms and conditions of your loan. Thoroughly
educate yourself regarding your mortgage note. Determine
what type of loan you have and how your loan was underwritten.
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Do you have an adjustable rate or interest only loan?
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Is your loan fully amortizing?
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Has your loan principal gone down, stayed the same or increased?
What is the interest rate on your loan? Will it adjust? If
so, when and how often?
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Did you pay a yield spread premium on the HUD-1? If so, how
much was it?
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Did your mortgage broker disclose the amount of the yield-spread
premium?
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Were you informed that you would pay a higher interest rate because of the yield-spread premium?
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Do you understand the benefits of it?
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Do you have a prime or subprime loan?
(See C) What was the appraised value of your
home?
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Was this amount accurate at the time of origination or was the
appraisal inflated?
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Did your loan tern change at the closing table? In other words,
was the loan you received the amount your loan officer originally
told you about?
Is your loan a stated-income loan and/or a lo or no doc loan?
If so, were you initially aware of this? (If not, you may be
the victim of a predatory lending scheme or fraud.)
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If your lender has gone into bankruptcy or is currently
going out of business, contact your lender to determine who
will be purchasing your loan. Obtain contact information for that new lender and/or servicer and determine when to start making payments to the new lender.
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Are you sixty days or more behind in your mortgage? If so, contact your
loan servicer to find out what action the lender will take. Often, loan
servicers are required to take certain actions before they start foreclosure
proceedings including but not limited to: 1) sending letters notifying you
that you are in breach of your mortgage contract; and 2) accelerating the
debt. These actions will happen automatically.
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Do you suspect fraud in your mortgage loan process? Were you subjected to
predatory lending? If so, contact your State Attorney General, the American
Association of Residential Mortgage Regulators (AARMR), your local fair housing
agency, or the Federal Trade Commission (FTC).
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Make sure that you have a copy of all of your original mortgage documentation.
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If your lender has gone into bankruptcy or is currently
going out of business, contact your lender to determine who
will be purchasing your loan.
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Make sure that you have copies of records pertaining to all mortgage check
payments.
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Make sure that you have a copy of any delinquency or foreclosure notice you
receive.
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Make sure that you are able to document proof of income.
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Tell your lender how much you can afford to spend on your mortgage.
Take control of the process and think through all scenarios before you start
renegotiating with your mortgage company.
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Know your rights as a homeowner. If you need help in figuring out what
your rights are, contact a reputable housing counseling or fair housing
agency in your area.
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Seek legal counsel - call your local university to inquire if it has a legal
clinic that can provide you with assistance at little or no cost to you.
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Has your mortgage company filed for bankruptcy? Do you know what next?
