Owning a Home: Tools and resources for homebuyers (Guides from the CFPB)

house-jerry-1

If you’re in the market for a home, these guides are a big help.

This article is provided to CRC by the Consumer Financial Protection Bureau.

Owning a Home

  • Owning a Home is a suite of tools and resources to educate, support, and empower consumers to shop effectively for a mortgage and to make better, more informed decisions throughout the mortgage process. It helps consumers understand the basics of mortgages, orient themselves to the market and the steps of the home loan process, and consider factors that may affect their own mortgage decision. The tools and resources aim to create a culture of shopping in the mortgage market by helping consumers understand what types of mortgages may be available to them, get organized to successfully navigate the mortgage shopping process, and learn what questions to ask along the way. The Owning a Home tools and resources described below are available at gov/owning-a-home/

KNOW THE PROCESS

  • The Owning a Home suite includes an interactive guide, Know the process, to help consumers navigate the mortgage process. The guide includes action steps, information, and tips that take consumers from the beginning of the process, when they are preparing to buy a home, through closing, when they sign for their mortgage loan. The guide includes four sections: Prepare to shop, Explore loan choices, Compare loan offers, and Get ready to close. The guide also includes links to the other Owning a Home tools and resources, described below, which allow consumers to consider factors specific to their situations. This guide is available at gov/owning-a-home/.

EXPLORE INTEREST RATES

  • The Owning a Home suite includes a tool that helps consumers explore the range of interest rates they might expect to be offered, and how much they might be able to save – for example, by shopping among different lenders, changing their down payment amount, or improving their credit score. The tool helps consumers orient themselves to the market and understand how shopping around for different offers or terms might affect their bottom line. This tool is available at gov/owning-a-home/explore-rates/.

UNDERSTAND LOAN OPTIONS

  • Understand loan options is a consumer guide to understanding the basics of mortgage loans and the key choices that make up a loan option, such as loan term, loan type, and interest rate type. Knowing what kind of loan options exist can prepare a consumer for talking to lenders and getting the best deal. This resource is available at gov/owning-a-home/loan-options/.

LOAN ESTIMATE AND CLOSING DISCLOSURE EXPLAINERS

  • New forms make it easier for consumers to understand and compare terms of different mortgage loans. The Owning a Home suite includes interactive sample disclosure forms that help consumers understand the details and terms used on the forms. The interactive sample disclosure for the Loan Estimate form is available at gov/owning-a-home/loan-estimate/. The interactive sample disclosure for the Closing Disclosure form is available at consumerfinance.gov/owning-a-home/closing-disclosure/.

CLOSING RESOURCES

  • Closing on a home and mortgage can be stressful. A mortgage loan is a major financial commitment, and consumers should review the loan contract and other materials carefully. However, there are a lot of documents to review. The Owning a Home suite includes two resources to help consumers navigate the process: a closing checklist and a guide to key closing documents. Both resources are available at gov/owning-a-home/process/close/.

Watch a Screening of “The Ordinance” with Stop the Debt Trap LA on Feb 22nd

Join Stop the Debt Trap LA on Wednesday, February 22nd from 2 – 4 pm for a screening of “The Ordinance” documentary film, followed by a short campaign briefing and planning meeting. the-ordinance

With billionaires, racists and Wall Street executives running the country, our communities are especially vulnerable.

Come learn more about how we’re organizing locally to shore up protections for consumers and communities against predatory lenders.

“The Ordinance” is a new short film focused on the fight to reform predatory lending in Texas, and the role that local communities, faith leaders and policy makers played in putting out the “not welcome” mat to financial predators in their community.

Much like in California, the Texas legislature is partial to the payday loan industry, and legally allows for abusive triple-digit interest rate lending. In Texas and in California, communities are fighting back and organizing to pass local policies in their cities to stop the growth of these industries and send a strong message to state and federal policy makers that enough is enough!

Come learn more about the local movement against predatory payday and car title lenders, and how you can get involved in our advocacy campaign!

Light refreshments will be provided.

Please RSVP either on CRC’s Facebook page, or by emailing Liana Molina.

If you have any questions or would like more information, contact Liana at liana@calreinvest.org

You can watch the trailer for the movie by clicking here.

New Payday Loan Facts in California

Did you hear that the Consumer Financial Protection Bureau is finalizing rules for high-cost payday, car title, and installment loans?

If you’re curious to know more about these loans, and the impact they have (mostly negative) on Californians and our state economy, then you’ll want to read CRC’s new fact sheet on payday lending in California.

It includes the latest data from the California Department of Business Oversight, as well as research on the negative drag to California’s economy created by payday loans.

california-payday-loan-brochure

 

 

You can download the fact sheet by clicking here.

If you want to learn more about payday loans in California- and the work the California Reinvestment Coalition is doing to take on predatory lending, click here and visit the CRC website.

Celebrate Sacramento Reinvestment 2016

At our Celebrate Sacramento Reinvestment event held in September 2016, CRC awarded Raise the Wage Sacramento its Community Heroes of the Year award.

Raise the Wage Sacramento is a grassroots coalition of workers and community organizers, whose fight at the local level was instrumental to the Governor’s passage of the statewide $15 minimum wage this past April.

Building on the Fight for 15 campaign led by local fast food workers, the coalition’s success at mobilization and public actions created for elected leaders an undeniable mandate to raise the minimum wage. While our country grapples with a national solution to address growing income inequality, Raise the Wage Sacramento is inspiring evidence of true grassroots power and leadership in the struggle for working people in every state.

This slideshow requires JavaScript.

CRC congratulates our honorees, and thanks our many sponsors for the event, whose sponsorship helps CRC to achieve our vision of an inclusive and fair economy that meets the needs of communities of color and low-income communities by ensuring that banks and other corporations invest and conduct business in our communities in a just and equitable manner.

California Lawmakers Call on CFPB for Stronger Payday Lending Rule

Payday Lenders

Have you heard?  After decades of abusive lending practices by payday, car title, and high-cost installment lenders, a federal agency, the Consumer Financial Protection Bureau (CFPB) will be releasing a new rule to better protect borrowers who use these loans.

The Center for Responsible Lending (CRL) and California Reinvestment Coalition (CRC) applauded California members of the U.S. Senate, U.S. House of Representatives, California State Legislature, city and county officials, and California Attorney General Kamala Harris who all sent official statements to the CFPB, calling on the bureau to strengthen an earlier, draft version of the rule.

In their letters, California lawmakers and attorney general highlighted that the proposed rule is a step in the right direction, but  that more needs to be done to ensure borrowers are not trapped in a cycle of debt by these predatory loans.

In California, payday lenders typically charge 366% APR on a $300, two-week loan.

Payday lenders and high cost lenders are also offering loans of $2,500 and above at 100% or higher  APRs. Consumers are especially vulnerable to this abusive practice as California does not have an interest rate cap for loans greater than $2,500.

“As elected representatives, we respectfully urge the Consumer Financial Protection Bureau to issue a strong federal payday lending rule that puts an end to the payday, car title, and high-cost installment loan debt trap nationwide” the legislators wrote.

“These high-cost unaffordable loans are detrimental to any community, but have a disproportionate impact on our African American and Latino neighborhoods. In California, payday lenders are twice as likely to be located in communities of color than in white communities, even after accounting for income. The core principle of CFPB’s proposal is the right approach—requiring lenders to ensure that a loan is affordable without having to re-borrow or default on other expenses. However, some of the details must be strengthened in order for this approach to truly work and protect Californians from predatory lenders.”

Payday lenders have invested in efforts to ward off state laws and federal regulations that would protect consumers. Some members of the California State Legislature, including California Assemblyman Ian Calderon (District-57) have pushed to weaken regulations against payday and car title lenders by calling on the CFPB to go light on rules that prevent abusive financial practices.

“This rule will create the first nationwide regulatory floor for the payday lending industry, while maintaining the prerogative of states to further strengthen their consumer protection laws and regulations as they see fit.” the attorney general wrote. “I strongly support the Bureau’s proposal to require a meaningful “ability-to-repay” standard and to curb collection abuses, as well as its proposals for structural protections to help protect consumers from being trapped in long-term, unaffordable debt.”

“Payday and car title lending significantly harm borrowers and their families. They lead to financial consequences, such as bank penalty fees, loss of cars, and bankruptcy. It’s discouraging to see that some members of the state legislature have aligned themselves with payday lenders instead of putting the interests of California families first.” explained Center for Responsible Lending Director of California Policy Graciela Aponte-Diaz. “We commend the members and the attorney general for their leadership and standing up against the payday lending industry.”

“For years, payday lenders have siphoned money out of the pockets of Californians who can least afford it,” said California Reinvestment Coalition Director of Community Engagement Liana Molina. “We applaud our state elected officials for standing up for responsible lending and we join them in urging the CFPB to finalize a rule that will protect borrowers.”

California state legislative members who signed the comment letter were:

Senators Bob Wieckowski, Mark Leno, Senator Fran Pavley, Hannah-Beth Jackson, Mike McGuire, Benjamin Allen, and Carol Liu; and Assembly Members Mark Stone, Patty Lopez, Philip Ting, Susan Talamantes Eggman, and Susan Bonilla.

The following local policymakers also called for a stronger payday lending rule:

Berkeley City Councilmember Jesse Arreguin, Menlo Park Mayor Rich Cline, Oakland Mayor Libby Schaff, San Jose Mayor Sam Liccardo, Roseville Mayor Carol Garcia, the Los Angeles County Board of Supervisors, San Mateo County Board of Supervisors President Warren Slocum, and Santa Clara County Supervisor Ken Yeager.

Additionally, U.S. Representative Maxine Waters led a group of more than 100 Congressional members in sending a comment letter to the CFPB Director calling for a stronger payday lending rule.

The California Congressional delegation members who signed the comment were: Peter Aguilar, Karen Bass, Xavier Becerra, Ami Bera, Judy Chu, Mark J. DeSaulnier, Anna G. Eshoo, Sam Farr, John Garamendi, Janice Hahn, Mike Honda, Jared Huffman, Barbara Lee, Ted W. Lieu, Zoe Lofgren, Alan Lowenthal, Lucille Roybal-Allard, Linda T. Sánchez, Jackie Speier, Mark Takano, Juan Vargas, and Maxine Waters.

Both U.S. Senators from California, Senators Dianne Feinstein and Barbara Boxer, have also signed on to a letter urging CFPB for a stronger rule.

CRL and CRC have consistently fought against abusive predatory lending practices across California. Recently, CRL and CRC sent comments to CFPB calling for the Bureau to end the payday lending debt trap and close off paths to evasion for predatory payday lenders. Read CRL’s letter here and CRC’s letter here.

As part of its rulemaking process, CFPB released its proposed rule on June 2, 2016, and has since received public comments from families, communities, and organizations. The final day for public comment was on October 7, 2016. The CFPB is expected to make its final decision on the regulations in 2017.

Bill Creating Foreclosure Protections for Widows and Heirs Explained in New Video

pic 2 SB 1150

“Red tape foreclosures” are a problem that are continuing to plague surviving homeowners throughout California, according to housing counselors and attorneys.

New legislation introduced by Senator Leno and Senator Galgiani, The Homeowner Survivor Bill of Rights, Senate Bill 1150, would address this problem.

SB 1150 clarifies the responsibilities of a mortgage lender when a borrower dies and passes the home along to a survivor who wishes to assume the home loan. The legislation ensures that heirs receive accurate information about loan assumption and foreclosure prevention programs. It also gives survivors a single point of contact with the lender and the ability to simultaneously apply for loan assumption and modification. SB 1150 is sponsored by the California Alliance for Retired Americans, Housing and Economic Rights Advocates and California Reinvestment Coalition.

A new interview with Kevin Stein, associate director of the California Reinvestment Coalition, explains the problems surviving homeowners are facing and how SB 1150 would address it.

If you would like to learn more after watching the video, visit: www.survivorbillofrights.org

Supporters of SB 1150 include

  • California Association of Retired Americans (co-sponsor)
  • Housing and Economic Rights Advocates (co-sponsor)
  • California Reinvestment Coalition (co-sponsor)
  • Attorney General Kamala Harris
  • AARP California
  • AIDS Legal Referral Panel
  • Bay Area Legal Aid
  • California District Attorneys Association
  • California Nurses Association
  • California Professional Firefighters
  • California Rural Legal Assistance, Inc.
  • California Rural Legal Assistance Foundation
  • CALPIRG
  • Capital Impact Partners
  • Community Housing Developers, Inc
  • Community Legal Services of East Palo Alto
  • Consumer Federation of California
  • Courage Campaign
  • Fair Housing of Marin
  • Family Caregiver Alliance
  • Institute on Aging
  • Justice in Aging
  • Legal Services of Northern California
  • Los Angeles County Democractic Party
  • National Center for Lesbian Rights
  • National Housing Law Project
  • Nehemiah Corporation of America
  • Neighborhood Housing Services of LA County
  • Project Sentinel
  • Public Counsel
  • Public Law Center
  • Renaissance Entrepreneurship Center
  • Rural Community Assistance Corporation
  • SEIU California
  • The ARC and United Cerebral Palsy California Collaboration
  • United Domestic Workers of America, AFSCME Local 3930, AFL-CIO
  • Unite Here
  • Western Center on Law and Poverty

New CFPB Study on Reverse Mortgage Ads find Many Contain Confusing, Incomplete, and Inaccurate Statements

Fred Thompson vs. new CFPB study

Picture of former Senator Fred Thompson in reverse mortgage advertisement

“When it’s a former Congressman endorsing it, it makes it sound like a good idea.” -consumer discussing reverse mortgage advertisements and celebrity spokespeople.

Earlier today, the CFPB released a study that examined advertisements for reverse mortgages.

They found:

Among the advertisements we collected, on their face, many contained confusing, incomplete, and inaccurate statements regarding borrower requirements, government insurance, and borrower risks. Furthermore, after viewing ads in our focus groups, many consumers were confused or had misconceptions about important features and terms of reverse mortgage loans. For example, some consumers struggled to understand that reverse mortgages are loans that must be repaid with interest. Consumers also often misinterpreted the role of the federal government in the reverse mortgage market as providing consumer protections that are not actually offered.

If you’re a regular follower of CRC, you know that we’re opposing the CIT Group and OneWest merger, and one of the issues that has come to light is the reverse mortgage servicing subsidiary of OneWest bank, innocuously named “Financial Freedom.”

At a Federal Reserve hearing held in February 2015 in Los Angeles, dozens of people and organizations testified against the merger.  A number of the people who either spoke or submitted testimony cited their incredibly difficult times trying to work with Financial Freedom, especially after the death of a loved one.

The issue of surviving spouses facing foreclosure due to a reverse mortgage that was originated solely with their deceased spouse has come to light thanks to a class action lawsuit by AARP against HUD for turning a blind eye to reverse mortgage brokers and companies originating these loans to only one spouse, with the implicit suggest that the often younger, often female spouse, wouldn’t face foreclosure and/or could be added to the loan later.  Now, these widowed homeowners are facing foreclosure.

HUD released a policy in January 2015 to address this issue, but most experts predicted it would be useless for the very people it was supposed to help.  In April, HUD rescinded the policy, but what about the homeowners who are potentially facing foreclosure?

Take a look at the testimony by Karen Hunziker, who is a surviving spouse, facing foreclosure.  Does this sound like a helpful loan servicing department, especially if you’re a grieving spouse?

Additionally OWB has failed to provide a Single Point of Contact. This creates a communication maze impossible to navigate for the consumer to get customer support or guidance.

One day, I called 5 times to verify I received the 90 day extension OWB promised in writing. I spoke to 5 different people all with a different story. In part, I was told:

• OWB didn’t receive the documents faxed multiple times,
• The documents needed to be reviewed by their legal department,
• I had to call back in 5 days
• I used up all my extensions.
• I didn’t get the documents in on time,
• The last person told me my property was scheduled for auction in 30 days.

At all times OWB refused to put any phone conversation in writing.

For more background on this issue, read these two articles.

Will grandma get run over by HUD’s reverse mortgage policy?

New Reverse Mortgage Policy Leaves Widows and Widowers Homeless

If you’re an attorney working with a surviving spouse facing foreclosure due to a reverse mortgage, or if you’re a surviving spouse facing foreclosure, please contact CRC if you’d like to join in advocacy on this issue. We are NOT able to represent you as an attorney, but we would like to have you join in our advocacy to bring greater attention to this problem and how it is affecting widowed homeowners.