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| Homeowners in default discover questionable fees | |||
| Written by Jonathan Dever | |||
| NEW YORK (11/14/07)--There's a new twist in the mortgage mess as more homeowners facing foreclosure discover they've been charged fees that don't add up ( The New York Times Nov. 6). A law professor from the University of Iowa analyzed foreclosures in Chapter 13 bankruptcy. She found vague, questionable fees had been tacked on to almost half the loans she examined by big lenders and by loan servicers--those who collect payments from borrowers and then pass those payments on to investors who own the loans. Some examples of dubious fees included demand fees, overnight delivery fees, fax fees and payoff statement charges. In addition, some borrowers were overcharged for legal services. In one case reported in The New York Times, a homeowner was overcharged by $24,450--attributed in part to almost $7,000 in commissions to the sheriff's office (not owed), and almost $13,000 in interest and fees for 16 unnecessary property inspections during a 29-month period. More than 2.2 million homeowners are in default, with an additional 2.2 million facing steep increases in payments as their adjustable-rate mortgages come due next year ( USA Today Nov. 9). The Federal Housing Administration (FHA) offers advice to help you keep your home: Disaster victims: If you live or work in an area officially declared a disaster, ask your lender about disaster relief, such as FHA-insured loans or other loans. Military families: Active duty personnel and spouses may qualify for a reduced interest rate and lower payments. Financially strapped households: Contact your lender as soon as you know you can't make your payments. The further behind you are on payments, the harder it will be to negotiate and the bigger the blemish on your credit, so act quickly--don't be embarrassed. Ask to speak to a housing counselor who can help you create a workable budget. Temporary problems may be resolved with reinstatement by a specific date, forbearance for a short period of time until you can bring the loan current, or a repayment plan. FHA also offers tips on avoiding foreclosure rescue scams. Don't sign papers you don't fully understand, always consult an attorney before entering into any home contract, and get all promises in writing. If someone tells you to transfer your property deed or title to their company, consider this a big red flag. For more information, read, "Lenders, Counselors Help Homeowners Avoid Foreclosure" in Home & Family Finance Resource Center. | |||
