Category Archives: “house to house”

House to House: Six Ways To Identify A Loan Modification Scam

In last week’s column I discussed a fairly new and dangerous threat has arisen for homeowners who have fallen behind on their mortgage payments and may be at risk of foreclosure – opportunistic companies. They often refer to themselves as a “foreclosure consultant”, “mortgage consultant,” and market themselves as a “foreclosure service”, “foreclosure rescue agency” or “loan modification company”. They count on homeowners being vulnerable and desperate.

These companies claim they can assist homeowners facing foreclosure with options that allow them to keep their property, refinance or modify an existing mortgage, repair credit or help “buy more time.” In reality, these “options” are intended to convince you to take the wrong steps so they can take your money and possibly your home. Remember the old saying, “If it’s too good to be true, it probably is.”

The Federal Trade Commission (FTC) has issued a new rule that bans the acceptance of an advance fee by mortgage relief/loan modification services until the homeowner has a written offer from their lender or servicer that they decide is acceptable. The Mortgage Assistance Relief Services (MARS) Rule is designed to protect homeowner from mortgage relief scams that have persisted during the current mortgage crisis.

According to the MARS Rule, mortgage relief companies must disclose that they are not associated with the government and that their services have not been approved by the government or a consumer’s lender; that the lender may not agree to change loan terms; and that consumers could lose their homes or damage their credit ratings if told to stop paying their mortgage. The MARS Rule also prohibits several common advertising tactics used by mortgage relief services and requires companies to have reliable evidence to support any claims about the benefits or effectiveness of the services they provide.

 “The good news for homeowners facing foreclosure is that legitimate avenues for relief exist,” McDaniel said.  “If a homeowner is having difficulty keeping up with mortgage payments, that homeowner should contact his or her lender to negotiate a modified payment plan. All lenders and servicers have a legal obligation to offer remediation services.”

 The National Association of REALTORS® and its partner NeighborWorks America, a national, nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts, have identified the following six red flags to indicate that you may be dealing with a loan modification scammer:

A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.

A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.

A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.

A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.

A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. And, remember, you do not have to pay to benefit from government-backed loan modification programs.

A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.

If you or someone you know has been the victim of a loan modification scam, the Arkansas REALTORS® Association urges you to please take action by doing any or all of the following:

Call the Homeowner’s Hope Hotline at 1-888-995-HOPE (4673).
Call the Federal Trade Commission (FTC) at 877-FTC-HELP (1-877-382-4357)

Contact Arkansas Attorney General Dustin McDaniel’s Consumer Hotline at (501) 682-2341 or (800) 482-8982. Consumers may also visit McDaniel’s website, http://www.arkansasag.gov.

♦♦♦

House to House is distributed weekly by the Arkansas Realtors® Association.

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House to House: Loan Modification Scams Proliferating

With the national foreclosure rate persistently high, many homeowners have turned to loan modification or foreclosure “rescue” companies for help – only to realize they’ve been scammed. Anyone can become a victim of a loan modification scam. Every day, scam artists prey on unsuspecting homeowners who are facing foreclosure. These homeowners are losing thousands of dollars and their homes—lured by the promise of loan modification help.

“The best way to prevent yourself from falling victim to a scam is to be educated about the scammers’ tactics and be ready to say ‘No’ to any deal you’re unsure about,” says Arkansas Attorney General Dustin McDaniel. “We encourage consumers to ask questions, go online to check the legitimacy of the party you’re dealing with, or contact our Consumer Protection Division if they are concerned.”

Common Loan Modification Scams

According to the National Association of REALTORS® and its partner NeighborWorks America, a national, nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts, the following are some of the most common loan modification scams out there today.

Phony Counseling or Foreclosure Rescue Scams
The scam artist poses as a counselor and tells you he can negotiate a deal with your lender to modify your loan or save your house—if you pay him a fee first. The fee may be called a processing fee or administrative fee. He may even tell you not to contact your lender, lawyer or housing counselor—that he’ll handle all details. He may even insist that you make all mortgage payments directly to him while he negotiates with the lender. Once you pay the fee, or a few mortgage payments, the scammer disappears with your money.

Fake “Government” Modification Programs
Some scammers may claim to be affiliated with, or approved by, the government, or they may ask you to pay high, up-front fees to “qualify” for government mortgage modification programs. The scammer’s company name and Website may sound like a real government agency, but the Website may end with .com or .net instead of .gov. You may also see terms like “federal,” “HAMP,” “MHA,” “HARP” or other words related to official U.S. government programs.

Contact your lender first. Your lender will be able to tell you if you qualify for any government programs to prevent foreclosure or modify your loans. And you do not have to pay to benefit from these programs.

Forensic Loan Audit
The scammer who may be called a forensic or mortgage loan “auditor” offers to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The scammer will usually require that you pay a fee to start the process. The scammer may say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan.

There is no proof that a forensic loan audit can save your home from foreclosure although it’s conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer. Even if you sue your lender and win, your lender is not required to modify your loan to make it more affordable. If you cancel your loan, you will have to return the borrowed money, which may result in you losing your home.

Bait-and-Switch
The scam artist convinces you to sign documents for a “new loan modification” that will make your existing mortgage current. This is a trick. You actually just signed documents that surrender the title or deed of your house to the scam artist in exchange for a “rescue” loan. Thoroughly read any document before you sign it.

Rent-to-Own or Leaseback Scheme
A scammer urges you to surrender the title or deed of your home as part of a deal that will let you stay in your home as a renter and then buy it back in a few years. He may tell you that surrendering the title will permit a borrower with a better credit rating to get new financing—and keep you from losing your home. However, the scammer may have no intention of ever selling the home back to you.

But the terms of these deals usually make buying back your home impossible. Worse yet, when the new borrower defaults on the loan, you’re evicted.

Short Sale Scam
Scammers, sometimes called “short sale negotiators” or “short sale processors,” may promise to expedite a short sale and usually require you to pay a fee, which is illegal in many states. Some scammers may even include surcharges or hidden fees before the transaction closes, which are also illegal in many states. The scammer may also misrepresent the value of the home to the lender.

A short sale may be a legitimate option for a homeowner in default or homeowner who is current yet the value of the home has fallen — if the lender agrees to the short sale. Homeowners should work with a REALTOR®  since the law requires that the person be properly licensed to negotiate the short sale with your lender.  Arkansas homeowners can verify licenses with the Arkansas Real Estate Commission by visiting their website at http://www.arec.arkansas.gov.

Bankruptcy to Avoid Foreclosure
The scammer may promise to negotiate with your lender or get refinancing on your behalf if you pay a fee up front. Instead of contacting your lender or refinancing your loan, he pockets the fee and files a bankruptcy case in your name—sometimes without your knowledge.

A bankruptcy filing often stops a home foreclosure, but only temporarily. Filing bankruptcy stops any collection and foreclosure while the bankruptcy court administers the case. But, eventually you must start paying your mortgage, or the lender will be able to foreclose.

You could lose the money you paid to the scammer and your home. Worse yet, a bankruptcy stays on your credit report for 10 years, which makes it difficult to obtain credit, buy a home, get life insurance or even get a job.

Next week, I’ll focus on 6 signs you can look for to indicate you may be dealing with a loan modification scammer.

***

House to House is distributed weekly by the Arkansas Realtors® Association.

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House To House: Americans more confident about the stability of home prices

The Arkansas REALTORS® Association released its monthly housing report last week showing that while home prices in Arkansas are still sluggish, January was a solid month for home sales.  In January Arkansas home sales saw a 13 percent increase in the number of Arkansas homes sold as compared with the same period last year – a time when the market was seeing a boost from the First-Time Homebuyer’s Tax Credit.  The report also showed that the average price of an Arkansas home increased by more than 2.5 percent in January to $143,030.

Arkansas REALTORS® Association President Andy Meyers said that thenumbers are reflective of growing consumer confidence.  “Sales occurring in January are reflective of purchase decisions being made during the holiday season and, when considered without the incentive of the home buyer tax credits, indicates that Arkansas consumers are becoming confident again.”

According to a recent national housing survey by Fannie Mae, Meyers is absolutely right.  The Fannie Mae Fourth Quarter National Housing Survey, conducted between October 2010 and December 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

According to the survey, Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy:

  • Seventy-eight percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010;
  • But almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.

“Over the course of the last year, we gained deeper insights into Americans’ confidence in the strength of the housing market and the economic recovery,” said Doug Duncan, Vice President and Chief Economist of Fannie Mae. “More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future.”

Other Survey Highlights

Younger Americans, Hispanics, and African-Americans are generally more positive about owning a home than the general population. Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis — from nearly forty-four percent when home prices peaked to under forty percent in 2009.

More than one-third of Hispanics (34%) and African Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.

The percentage of Americans who believe that buying a home is a safe investment declined to 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment.

During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74%) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.

One out of three delinquent borrowers continues to say they have considered defaulting on their mortgage. However, that number fell from 39 percent at the beginning of the year to 31 percent in the fourth quarter. The number of delinquent borrowers who say they have seriously considered defaulting also has declined, from 25 percent in January 2010 to 19 percent.

For more detailed findings from the survey, visit http://www.fanniemae.com/media/survey/index.jhtml.  To subscribe to the Arkansas REALTORS® Association’s Monthly Housing Reports readers can email me at Questions@ArkansasRealtors.com.

 House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas REALTORS® Association.

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House to House: No Matter What the Emergency, Preparedness Is Key

The old joke, “If you don’t like the weather in Arkansas, just wait a day” seems more like the truth the older I get.  I believe it was just two weeks ago that my family and I were celebrating “Sledfest” at our house.  Last night as I watched the Oscars I was being warned of potential tornadoes in my area and this morning when I woke up all of America seemed to be talking about earthquakes in Arkansas.  At t his rate, I expect a blizzard to envelope us next week..

No matter what the severe weather outlook, it is important for Arkansans to have a plan in place in case of an emergency.  According to the Federal Emergency Management Agency (FEMA) this means means having your own food, water, and other supplies in sufficient quantity to last for at least three days.

 The following is a recommended list of items to include in a basic emergency supply kit:

 – Water, one gallon of water per person per day for at least three days, for drinking and sanitation

– Food, at least a three-day supply of non-perishable food

– Battery-powered or hand crank radio and a NOAA Weather Radio with tone alert and extra batteries for both

– Flashlight and extra batteries

– First aid kit

– Whistle to signal for help

– Dust mask, to help filter contaminated air and plastic sheeting and duct tape to shelter-in-place

– Moist towelettes, garbage bags and plastic ties for personal sanitation

– Wrench or pliers to turn off utilities

– Can opener for food (if kit contains canned food)

– Local maps

– Cell phone with chargers

 Additional items to consider adding to an emergency supply kit include:

 – Prescription medications and glasses

– Infant formula and diapers

– Pet food and extra water for your pet

– Important family documents such as copies of insurance policies, identification and bank account records in a waterproof, portable container

– Cash or traveler’s checks and change

– Emergency reference material such as a first aid book or information from http://www.ready.gov

– Sleeping bag or warm blanket for each person. Consider additional bedding if you live in a cold-weather climate.

– Complete change of clothing including a long sleeved shirt, long pants and sturdy shoes. Consider additional clothing if you live in a cold-weather climate.

– Household chlorine bleach and medicine dropper – When diluted nine parts water to one part bleach, bleach can be used as a disinfectant. Or in an emergency, you can use it to treat water by using 16 drops of regular household liquid bleach per gallon of water. Do not use scented, color safe or bleaches with added cleaners.

– Fire Extinguisher

– Matches in a waterproof container

– Feminine supplies and personal hygiene items

– Mess kits, paper cups, plates and plastic utensils, paper towels

– Paper and pencil

– Books, games, puzzles or other activities for children

Through its Ready Campaign, the U.S. Department of Homeland Security educates and empowers Americans to take some simple steps to prepare for and respond to potential emergencies, including natural disasters. For more information on how your family can develop a family emergency plan, visit www.Ready.gov

 House to House written by Amy Glover Bryant, Director of Communications, and is distributed weekly by the Arkansas Realtors® Association.

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House to House: Renting? Know Your Responsibilities

A friend’s recent experience in trying to rent a house he owned brought to mind the possible lack of information that some renters may have in regard to their responsibilities as renters who are paying for the right to enjoy someone else’s property.

No one wants to see someone evicted, but unfortunately, that action is sometimes the end result when renters do not live up to their responsibilities. The agreement between landlord and tenant will control the tenant’s responsibilities, so make sure that as a renter, you are clear on what is expected in regard to your individual situation.

To help landlords and tenants, the Arkansas Realtors Association; the law firm of Quattlebaum, Grooms, Tull and Burrow PLLC; the Institute of Real Estate Management; and the Arkansas Real Estate Commission worked together to develop the Arkansas Landlord/Tenant Handbook. The handbook was prepared to help both tenants and landlords understand their responsibilities, as well as rights. While a diligent attempt was been made to ensure that the information is accurate, no guarantee of accuracy is provided, and the handbook does not purport to cover all possible situations or problems. These materials are provided for educational purposes and should not be received as legal opinions for pending or future legal matters.

Here are a few common requirements of renters/tenants that the handbook brings to light:

• Pay all of your rent on time. If you think the landlord is being unfair, or the rented property is in poor condition, discuss these matters with your landlord. Most disputes between a landlord and a tenant can be resolved if the rent has been paid.

• Take “good care” of the property you are renting. It is, after all, the landlord’s property, and you are paying for the use of it. When you move out of the property, it must be in the same condition as it was when you moved in, except for normal wear and tear.

• Let your landlord know when you are going to be out of town or away for a period of time. If possible, let them know how to contact you. If they notice you are gone but haven’t been informed ahead of time, they may think you have abandoned the property.

• Comply with local board-of-health rules and the landlord’s rules and regulations for tenants.

• Keep the property clean.

• Inform the landlord, in writing, of needed repairs as soon as you discover that a repair is necessary.

• Be considerate of other tenants and neighbors. They have the same rights that you do.

• Abide by all the terms of your lease or rental agreement. For example, if the lease or rental agreement says “no pets,” then you may not have pets.

• Except as permitted by law, you should not increase the number of occupants specified in the lease or rental agreement without the written permission of the owner.

• Give the landlord written notice before you move out. Normally, you should provide the landlord notice a number of days prior to moving out which is equal to the cycle that you pay rent, unless more time (which the law requires to be reasonable) is specified in your lease or rental agreement. For example, if you pay rent once a month, then provide notice to your landlord of an intention to move one month prior to the date you are moving.

• Take all precautions that you deem necessary to ensure the safety of people and personal property in and around the property. Safety is not the responsibility of the landlord, and you should not expect the landlord to make repairs or take precautions to make rented property (or areas around rented property) safe. You may wish to consider insurance for all personal property you place on the property.

To print out a copy of the Arkansas Landlord/Tenant Handbook, visit http://arkansasrealtors.net/images/landlordtenanthandbook.pdf  or contact the Arkansas Realtors Association at Questions@ArkansasRealtors.com.

House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas Realtors Association.   For more information about the ARA, visit www.ArkansasRealtors.com.

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House to House: Portable Generator Safety Guidelines

Arkansas’s recent winter weather event likely caused some Arkansans to pull out and gas up their portable electric generators.  The men in my house were actually rooting for the electricity to go out so that they’d have a reason to utilize the one they received for Christmas.

 While portable generators are useful during temporary power outages, it is important to remember that they can also be hazardous.

“Home emergency generators can provide a great level of convenience during natural disasters, like an ice storm,” said Doug White, vice president of systems services for the Electric Cooperatives of Arkansas. “However, if used improperly a generator can injure the homeowner and the cooperative line crews working to restore electrical service. Appliances can also be damaged.”

 If a portable electric generator is connected to the main electrical supply coming into the house, the electrical generator could feed back into the electric cooperative’s system and electrocute workers who are repairing the electrical lines, according to White.

Doug White, vice president of systems services for the Electric Cooperatives of Arkansas

White said that to avoid back-feeding of electricity into utility systems, a homeowner should have a qualified, licensed electrician install a double-pole, double-throw transfer switch between the generator and utility power in compliance with all state and local electrical codes. (A minimum of 10-gauge wiring must be used.)

 “In addition to protecting linemen by insuring proper wiring, a homeowner should carefully calculate wattage requirements to prevent overloading and damage to appliances and the generator,” he said.

White asked that homeowners notify their local electric cooperative when they purchase a standby generator so the electric cooperative can be aware of your location.

Homeowners can also suffer electrocution if the generator is being operated in wet conditions.  If you must use a generator when it is wet outside, protect it from moisture by operating it under an open, canopy-like structure on a dry surface where water cannot reach it or puddle under it.  It is also important to make sure your hands are dry before touching the generator.

According to the U.S. Consumer Product Safety Commission, generators also pose a risk of death or injury due to carbon monoxide poisoning.  The CPSC recommends the following safety tips to avoid CO poisoning while using generators:

  • Never use a generator inside homes, garages, crawlspaces, sheds or similar areas, even when using fans or opening doors and windows for ventilation.  Deadly levels of CO can quickly build up in these areas and can linger for hours, even after the generator has shut off.
  • Follow the instructions that come with your generator.  Locate the unit outdoors and far from doors, windows and vents that could allow CO to come indoors.
  • Install battery-operated CO alarms or plug-in CO alarms with battery back up in your home, according to the manufacturer’s instructions.

Last, but certainly not least, never store fuel for your generator in your home.  Gasoline, propane, kerosene and other flammable liquids should be stored outside of living areas in properly-labeled, non-glass safety containers.  Homeowners will also want to remember to turn off the generator and let it cool down before refueling so as not to risk gasoline igniting on hot engine parts.  Remember, no matter what the time of year, you should never store flammable liquids near fuel-burning appliances such as a natural gas water heater. 

House to House is written by Amy Glover Bryant, APR and distributed weekly by the Arkansas Realtors® Association.

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Check Propane Levels in Anticipation of Winter Weather

At this time of year, Arkansans can anticipate that winter precipitation will impact everything from school schedules to sporting events, and most Arkansans wisely stock up on groceries and stay near home to avoid hazardous driving conditions.
 
However, in their hasty preparations for winter storms, many Arkansans — especially those living in rural areas that depend upon liquid propane gas for home heating — may overlook the possibility that icy roads may cause disruptions to gas delivery services. Thus, Attorney General Dustin McDaniel issued a consumer alert today encouraging those who depend upon LP gas for heating to include a check of fuel level in the tank in winter weather preparations.
 
McDaniel also alerted consumers to a 2009 state law which may assist Arkansas residents whose LP gas provider cannot deliver gas because of road conditions.
 
“It is inconvenient to be stuck at home when the roads get icy, but it could even be dangerous if you lose your heat and hot water, “ McDaniel said.  “This is particularly critical for elderly residents. And in rural areas where the use of LP gas for heating is common, an ice storm can interfere with normal delivery service for days.”
 
The Attorney General noted that most Arkansas consumers who depend upon LP gas also rent the LP gas tank from the provider of gas. Under normal conditions, Arkansas law requires that such tanks be filled only by the provider who owns the tank. However, after some providers shut down deliveries during a 2009 ice storm, the Arkansas legislature passed an amendment to the LP gas law that permits any providers to fill a tank if the primary provider cannot complete a timely delivery.
 
The law is triggered if the Governor has declared a state of emergency and the Director of the Liquefied Petroleum Gas Board issues an order invoking the provisions of the law.
 
The Attorney General issued these tips to affected consumers:
 
• Check your tank level well before the winter season and order a fill as necessary.
 
• Buying LP gas in the summer may also have a financial benefit, since prices tend to be lower then.
 
• Own the tank. A consumer that owns his or her own tank may have it filled by any provider. If one provider is backed up making cold-weather deliveries, another may be available immediately.
 
• Owning an LP gas tank rather than renting has financial benefits, too. Owners do not have to pay tank rental fees and shop for the best price on gas.
 
For more information on LP gas laws in Arkansas, contact the Liquified Petroleum Gas Board at (501) 683-4100.
 
For Arkansans who have questions about this or other consumer issues, visit the Attorney General’s website at www.arkansasag.gov or call the Office’s Consumer Hotline at (501) 682-2341 or toll-free at (800) 482-8982.

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