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Housing

Foreclosure
For Homeowners
For Prospective Homeowners
For Renters
Housing and Economic Recovery Act of 2008

How To Avoid Foreclosure

Foreclosure

Home Sweet Home

It's clear that the staggering rate of mortgage foreclosures has tarnished an age-old symbol of the American Dream. Yet many struggling homeowners don't realize that foreclosure is not the only option. Falling behind on payments doesn't necessarily mean giving up the home you worked so hard to acquire.

CCCS is certified by the U.S. Department of Housing and Urban Development (HUD) as a comprehensive housing counseling agency. Our HUD-trained and certified housing counselors provide expertise to help you through a variety of issues and concerns--including pre-purchase, mortgage default, rent delinquency, post occupancy and declined loan application.

Here's an overview of our housing-related services--available to homeowners, prospective homeowners and renters.

FOR HOMEOWNERS

Mortgage Default and Delinquency Counseling

We can help you establish a budget, set priorities, and determine the appropriate strategies to help you keep your property. It's our experience that landlords and lenders are often willing to be flexible about repayment of late or missing payments. Our certified housing counselors will discuss your options and develop a plan to get you back on track.

Reverse Equity Mortgage Counseling

If you're over age 62, a Reverse Equity Mortgage enables you to tap into the equity of your home--giving you access to regular income without selling your home or making loan payments. Our counselors will review your financial situation, determine if you qualify for a home equity mortgage and help you evaluate other options for increasing income.

Post-Purchase Counseling

Our counselors offer guidance on second mortgages, equity loans, home improvement loans, and refinancing.

FOR PROSPECTIVE HOMEOWNERS

Home Buyer Education Workshops

Interested in buying your first home? CCCS workshops offer a step-by-step explanation of the home buying process--which can save you time, money and stress later. We'll help you:

?    Determine how much you can realistically afford
?    Review your credit and help you prepare your credit for home ownership;
?    Develop a savings plan for your down payment; and
?    Decide what kind of mortgage is right for you.

As an added benefit, these workshops are HUD-approved for mortgage insurance reduction and down payment assistance education requirements.

Private Pre-purchase Counseling

Learn the basics of the home buying process in a private one-hour session with
a CCCS certified housing counselor. As you become a homeowner, we can also show you how to develop a monthly budget to help you plan for household expenses, improvements and those "unexpected" bills that may arise.

Tennessee first-time home buyer programs

THDA's Homeownership programs are designed for low- and
moderate-income borrowers. The Great Rate Mortgage program offers a
below-market interest rate loan secured by a first mortgage. Great Start
offers a loan at a slightly higher interest rate, secured by a first mortgage, but
also provides assistance with down payment and closing costs. Learn about it here.

FOR RENTERS

Rental Counseling

Whether you're looking to move into a rental, or you're behind on current rental payments, CCCS counselors can review your options based on your financial situation.

For more information about our CCCS housing services or to make an
appointment, contact our Housing Department at housing@cccsinc.org, or
call us at our special toll-free housing number, 1-866-616-3716.

HOUSING AND ECONOMIC RECOVERY ACT OF 2008

On July 30, President Bush signed the Housing and Economic Recovery Act of 2008. The law enables mortgage lenders to participate in a new Federal Housing Administration (FHA) program that allows "at risk" borrowers to refinance their current mortgage into a new fixed-rate loan insured by the FHA. However, lenders' participation in the program is voluntary.

The legislation becomes effective on October 1.

Homeowners must meet several criteria to qualify for this program. They include:

• They must own and currently live in the home and may not own any other residential property.
  

• The existing mortgage must have been originated prior to January 2008.
  

• Borrowers who are current on their mortgage payments, as well as those in default, may be eligible for the program. However, all borrowers must spend at least 31% of gross monthly income on mortgage debt and must be unable to afford payments on that mortgage (qualifying criterion and documentation for this provision have not yet been developed).
  

• The HOPE loan will be a 30 year fixed rate mortgage and may not exceed 90% of the current appraised value of the property. An additional 3% mortgage insurance premium will be financed in the mortgage making the initial loan to value 87%.
  

• All first and subordinate mortgages, including home equity loans, must be either paid off by the borrower or paid in full from the proceeds of the new HOPE loan.
  

Many homeowners will not have the funds available to pay off a home equity loan or other subordinate liens, or to pay down the first mortgage to 87% of current appraised value.

This means that, in just about every case, the mortgage servicer and the company that holds the home equity loan must agree to forgive much of the debt.

Homeowners also need to understand there are costs associated with the new program. In addition to loan origination fees determined by the lender, borrowers are responsible for paying an insurance premium to the FHA equaling 1.5 percent of the principal annually.

Finally, if a homeowner is eligible for the new FHA program and receives an offer from their lender, they must understand the following conditions apply:

• The borrower must agree to share both initial equity and future appreciation with The U.S. Housing and Urban Development Department.
  

• The equity sharing agreement will state that if the house is sold within the first year, 100 percent of the initial equity (generally 10% of the value of the property at origination) will go to FHA. After 1 year, FHA is entitled to 90 percent of the initial equity. The percentage keeps dropping in 10 percent increments to 50 percent after the fifth year, where it stays.
  

• In addition to the initial equity which is a fixed amount, 50% of any future appreciation of the property must be paid to HUD when the property is sold.

Important Note:  Homeowners who do not qualify for the new program may still seek help to avoid foreclosure by calling CCCS of Greater Atlanta and asking to speak with a counselor.  Our housing counselors are available 24 hours a day, seven days a week on the web at www.cccshope.org and by phone at 800-251-2227.

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