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

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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/.

HUD Denied Our Fee Waiver for a FOIA Request About Reverse Mortgage Complaints

It would appear that HUD does not want CRC, nor the general public, to know more information about reverse mortgages, complaints about them, or foreclosures on surviving spouses.

In late 2014, we submitted a Freedom of Information Act (FOIA) request to HUD, asking, among other things for data related to:

  • the number of complaints that have been filed to HUD about reverse mortgages serviced by Financial Freedom;
  • any data on estimates of the number of non-borrowing spouses who could face foreclosure if their reverse mortgage borrowing spouse were to pass away;
  • the number of complaints made against Financial Freedom, a reverse mortgage servicer that is owned by OneWest Bank, a bank which is trying to merge with CIT Group; and
  • the number of foreclosures on surviving spouses by Financial Freedom since April 2009, and the number of foreclosures for the industry as a whole.

In December 2014, HUD denied our request for a fee waiver.   We appealed.

Today, we heard back that we have lost our appeal.  HUD’s letter to CRC suggests that we failed to meet the criteria that “the disclosure of the information would contribute significantly to the public’s understanding of government activities or operations.”

To understand why this is so problematic, consider why we submitted a FOIA request in the first place.

For years, reverse mortgage brokers have been telling couples that it is okay to remove the younger spouse from the title of the home in order for the older spouse to obtain a reverse mortgage.  Couples were told there was no chance the younger spouse would be kicked out if the older spouse were to pass away, or in other cases (like this one), they were told the younger spouse could be added onto the mortgage as soon as they turned 62.  All of this was done with HUD turning a blind eye to this practice.  Unfortunately, as the older spouses have passed away, reverse mortgage servicers have been moving to foreclose on the surviving spouse.

HUD is already being sued for enabling these foreclosures and as a result, a federal judge ordered HUD to develop a policy to assist theses non-borrowing, surviving spouses.  The policy that HUD announced in January is NOT expected to help any surviving spouses because it relies on the servicer’s discretion and because it would likely require the surviving spouse to come up with a large lump sum of cash.  For more on this, see today’s press release:  Advocates: Grandma May Get Run Over By HUD’s New Reverse Mortgage Policy

So, what should one conclude from HUD denying a fee waiver for our FOIA request because granting it would NOT contribute significantly to the public’s understanding of government activities or operations?

We feel the public would gain a lot from this knowledge.

A 2013 story below illustrate why we think it’s important for HUD to disclose this information.  Stay tuned to hear our next steps.

Reverse Mortgage Nightmare

WFMY News2Reverse Mortgage Nightmare: Widow Facing Foreclosure

WINSTON-SALEM, N.C.– In 2007, a knock at Barbara Freeman front door, came with a great opportunity: to be debt-free and take care of her sick husband.

This year, another knock at that same door was a sheriff’s deputy serving foreclosure papers — and that’s when her nightmare began.

The widow is now at the brink of losing everything she and her husband worked for all because of a reverse mortgage. In the most simplified terms, reverse mortgages differ from “regular mortgages” because in the latter, a homeowner makes monthly payments to a lender.

Watch the full story here: Reverse Mortgage Nightmare: Widow Facing Foreclosure