Debt Consolidation Loans

Homerefinance

Hundreds of people streamed into a courtyard on Miami Dade College’s North Campus last weekend, hoping to get help hanging onto their homes. The Foreclosure Prevention Clinic, sponsored by Congressman Kendrick Meek, drew a crowd estimated at more than 800 people.

Lenders, as well as local housing agencies and representatives from the U.S. Department of Housing and Urban Development (HUD), Fannie Mae and Freddie Mac, were on hand April 12 to offer direct help to borrowers.

Debt Consolidation Loan

Meek said the purpose of the clinic, the first sponsored by his district office (which annually conducts home-buying seminars titled, “With Ownership Wealth’’), is to give direct help to homeowners like Philipa.

Meek said the seminar was intended to offer direct help, in addition to information. Loss prevention representatives from some 20 lenders including Bank of America, SunTrust, Washington Mutual and Wells Fargo offered one-on-one counseling to homeowners. HUD representatives at the clinic explained the federal agency’s “FHA Secure’’ program, which offers homeowners with adjustable-rate mortgages (“ARMs’’) the chance to refinance to a fixed-rate loan with an approved lender.

Refinance With Bad Credit

“People who are two months behind on their mortgages can refinance to 97 percent of their home value. Homeowners whose lenders were not present at the clinic could avail themselves of counseling from county housing agencies like the Housing Finance
Authority of Miami-Dade County, or from non-profit agencies like the Miami-Dade Affordable Housing Foundation,
Inc., ACORN and NeighborWorks America.

Another non-profit, Legal Ser-vices of Greater Miami, Inc., was on hand to offer free legal advice to homeowners in trouble.

Wright, the Bank of America community impact manager, agreed.

Lionel Roland, who also attended the event, agreed. Beyond the April 12 event, Meek said the House Ways and Means committee would offer a bill designed to address the nationwide mortgage crisis.

The Housing Assistance Tax Act of 2008, introduced by U.S. Rep. Charlie Rangel (D-NY), would provide tax credits to first-time homebuyers, allow families to deduct part of their property taxes, and temporarily increase the low-income housing tax credit to give builders new incentives to build low-income housing.

For homeowners, the legislation would call for the issuance of $10 billion in new, tax-exempt bonds to refinance some sub-prime loans.

Next up: those who have combined their mortgages with home equity loans, second loans or both.
These combinations spell especially bad news for homeowners in Sacramento, Calif., San Diego, Washington, D.C., and Colorado Springs, Colo., markets with some of the nation’s highest concentrations of homeowner debt. In Depth: Worst Cities For Homeowner Debt
We relied on U.S. Census data to determine which of the country’s largest 150 housing markets had the highest percentage of outstanding home equity and second loans. Because neither on its own signifies a homeowner’s level of overextension, we combined those data with housing price trends taken from the National Association of Realtors, to gauge which markets are experiencing steep price drops. Homeowners in these areas might have the hardest time refinancing or staying afloat.
“Second home mortgages and home equity loans are a phenomenon of the last 15 years,” says William Wheaton, an economics professor at the Massachusetts Institute of Technology. By the Federal Reserve Board’s count, the total amount of outstanding home equity loans grew from $260 billion in 1995 to $970 billion in 2005. Homeowners love these sorts of loans in an up market because they get cash in hand, and they can deduct the interest.
It’s when you start to combine home equity loans, second mortgages and a falling market that things get dicey.
Cloudy Skies Over Parts Of Colorado
Consider Denver, where 29% of mortgage holders have either a home equity loan or a second mortgage, or both–the highest rate in the country. Borrowers armed with such “piggyback loans,” bought homes without any money, only credit.
Denver has the country’s ninth-highest foreclosure rate, despite a healthy economy in which the job market is growing.
Are you concerned with home prices in your area? When homeowners in a negative equity situation try to short a property, they have to negotiate with all of their lien holders (first mortgage, second mortgage, home equity loan). Slumping home prices mixed with home equity lines of credit and second mortgages also signal a slowdown in local economies, since the loans are often used for home improvements or big-ticket items.

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