Facing Foreclosure: Help is Available
Foreclosure rates on home mortgages have
increased in the past year all around the
country. Maine has been hit harder than
many areas. Maine has the eighth highest
number of foreclosures among the 50
states. The number of homes currently in
foreclosure in Maine is the highest it’s ever
been. Rising food and fuel costs, as well
as the shaky economy all make it very hard
for families to pay their basic expenses,
including the mortgage.
Many foreclosure victims have “subprime
loans.” These are loans with higher
interest rates that are often “adjustable rate
mortgages” (“ARMs”). This means that
the interest rates may be low for the first
couple of years, but then shoot up to very
high levels. For the last three months of
2007, nearly 19% of subprime mortgage
borrowers were behind on their payments.
An additional 11.26% of subprime
mortgages were in foreclosure.
“Predatory loans,” a type of subprime loan,
are particularly dangerous. These are usually
the loans that sound too good to be true.
They almost always are. Predatory lenders
trick homeowners who need but can’t find
a loan into a bad deal that ends up robbing
them of much of their assets. Some lenders
are “rescue scammers;” they take advantage
of homeowners who want to keep their
home at all costs.
These are common signs of a predatory
lending agreement:
- Large fees not included in the interest rate.
- Heavy penalties for paying the loan off early.
- “Yield spread premiums” (basically kickbacks to the mortgage broker).
- “Mandatory arbitration” (limiting the borrowers’ ability to sue the lender later).
- High monthly payments that the lender charged without checking the borrowers’ ability to pay.
If you are facing foreclosure now or worried
about the future, help is available. If you
think you have been a victim of predatory
lending, don’t wait until things get worse
– get help now!
Pine Tree Legal Assistance helps Mainers
with low income with foreclosure problems.
They provide free legal help.
HUD-certified
housing counselors like Coastal Enterprises
and many of the local Community Action
Programs also offer guidance on avoiding
foreclosure.
Contact Pine Tree Legal Assistance or view their
Foreclosure Prevention Toolkit.
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