Resources for Homeowners

Get Educated!
Find a Housing Counselor
Know Your Rights!
Avoid Predatory Lending
Settlement Protection Special Information Booklet
Help for Non-FHA Loans
Contact FHA Resource Center

Get Educated! - (Top)

FHA has many�video webcasts about home buying and knowing your rights. You'll want to start with:

Your Home, Yours to Keep (15 minutes)

• Without captions
• With captions
• 56k

Find a Housing Counselor - (Top)

If you want advice on buying a home, renting, default, foreclosure, credit issues or reverse mortgages, HUD sponsors certain housing counseling agencies throughout the country who in turn give advice free or at low cost.

Search online for a counseling agency near you, or call HUD's interactive voice response system at: (800) 569-4287.

Know Your Rights! - (Top)

Your home loan may be the largest and most important loan you get in your life. Be aware of your rights before you enter into any loan agreement.

• You have the RIGHT to shop for the best loan for you and to compare the charges of different lenders and brokers (licensed individuals or firms that mediate between buyer and seller).
  
  
• You have the RIGHT to be informed about the total cost of your loan including the interest rate, points and other fees.
  
  
• You have the RIGHT to ask for a Good Faith Estimate of all loan and settlement charges before you agree to the loan and pay any fees.
  
  
• You have the RIGHT to know what fees are not refundable if you decide to cancel the loan agreement.
  
  
• You have the RIGHT to ask your lender or mortgage broker to explain exactly what they will do for you.
  
  
• You have the RIGHT to know how much you and the lender are paying the mortgage broker.
  
  
• You have the RIGHT to ask questions about charges and loan terms or language that you do not understand.
  
  
• You have the RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
  
  
• You have the RIGHT to know the reason why--if your loan was turned down.
  
  
• You have the RIGHT to ask for the HUD settlement costs booklet "Buying Your Home."

For other helpful information go to the Real Estate Settlement Procedures Act (RESPA) web page.

Avoid Predatory Lending - (Top)

Buying or refinancing your home is one of the most important and complex financial decisions you'll ever make. Many good lenders, appraisers and real estate professionals are ready to help you get a nice home and a great loan. Others may not have your best interests at heart. Every year, uninformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud.

Over the last several years our nation has made huge progress in expanding access to capital (investment money) for previously under-served borrowers, many of them low- and moderate-income families. Despite this progress, too many families are suffering today because of growing numbers of abusive practices by some mortgage lenders. They are called predatory lenders because they prey (take advantage of) people who may have difficulty meeting normal loan requirements. Predatory lenders use deceptive (dishonest) and unfavorable lending practices that are not in the borrower's best interest, such as offering a loan to someone who doesn't have enough income to repay the loan. They can take borrower's home equity and threaten families with foreclosure. This then weakens communities that are just beginning to prosper.

If you believe you have been a victim of predatory lending practices, there are organizations that can help. Read on, and immediately contact the organization for help with your specific problem, or ask any one of them where to call to find the right person for help.

Protect Yourself from Predatory Lenders by Being A Smart Consumer

1. Before you look at a home to buy, attend a homeownership education course offered by a HUD-approved housing counseling agency.
   
   
2. Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
   
   
3. Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much by not doing the research.
   
   
4. Hire a properly qualified and licensed home inspector to carefully inspect the property before you promise to buy. Decide if you or the seller will pay for any repairs. If you have to pay for the repairs, figure out if you can afford them.
   
   
5. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender or puts pressure on you to decide before you talk to other lenders. Beware of "you must sign today" tactics.
   
   
6. Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, hiding the source of your down payment, concealing the nature and amount of your debts, or even claiming how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties for you as well as the other person.
   
   
7. Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property and possibly owing even more money.
   
   
8. Do NOT let your emotions talk you into buying too much house or accepting information that you don't understand. There are many houses out there that would be "perfect" for you. And many lenders that will give you the right deal for you. Don't be emotional.
   
   
9. Never sign a blank document or a document containing blanks. Write "N/A" (meaning "not applicable") or cross through any blanks. If information is filled in by someone else after you have signed, you may still be bound to the terms of the contract.
   
   
10. Read everything carefully and ask questions. Never sign anything that you don't understand. Before signing, have your contract and loan agreement reviewed by a real estate lawyer, consult a trusted real estate professional, or ask for help from a HUD-approved housing counseling agency. If you can't afford an attorney, take your documents to the housing counseling agency to see if they will review the documents or can refer you to a lawyer who will help you for free or at a low cost.
    
    
11. Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing.
    
    
12. Be honest about your intention to occupy the house. Stating that you plan to live there when you really don't (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.

How to Spot Predatory Lending

In communities all across the country people are losing their homes and their investments because of lenders, appraisers, mortgage brokers and home improvement contractors who:

• Sell properties for much more than they are worth using false appraisals.
• Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
• Deliberately lend more money than a borrower can afford to repay.
• Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
• Charge fees for unnecessary or nonexistent products and services.
• Pressure borrowers to accept higher-risk loans such as balloon loans (loans with initial low payments and a huge payment due later), interest only payments, and steep pre-payment penalties (money charged for paying off the loan ahead of schedule).
• Take advantage of borrowers in need of cash due to medical, unemployment or debt problems by offering cash-out refinance offers.
• "Strip" homeowners' equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
• Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.

What Tactics Do Predators Use?

• A lender or investor tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and houses.
• The house you are buying costs a lot more than other homes in the neighborhood, but isn't any bigger or better, or you couldn�t resell at about the same price in the future.
• You are asked to sign a sales contract or loan documents that are blank or that contain false information.
• You are told that FHA insurance protects you against property defects or loan fraud - it does not.
• The cost or loan terms at closing are not what you agreed to.
• You are told that refinancing can solve your credit or money problems.
• You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.

Remember: If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!

Local information on predatory lending: Check the Local Resources by state web pages that can help you avoid being a victim of predatory lending.

For FHA loans: For lender problems relating to origination, underwriting, or appraisals, contact the FHA Resource Center at (800) 225-5342 (800-CALL-FHA).

Help for Non-FHA Loans - (Top)

Non-FHA mortgage loans: For complaints about non-disclosure of interest rates and finance charges (annual percentage rates), prepayment penalties, credit life insurance, fraud, deception, etc., contact the appropriate agency listed below to complain about the mortgage lender or mortgage broker.

Settlement Protection and Special Information Booklet - (Top)

Settlement protection for FHA and non-FHA mortgages: Read about Buying Your Home and Settlement Practices. RESPA is a federal law that deals with closing costs and settlement procedures. It protects homebuyers during the buying process and helps them to be better home shoppers You will read about RESPA disclosure requirements such as the Good Faith Estimate, HUD-1 and escrow account statements, and how to file a complaint with your lender about the servicing of your loan in this booklet.

File a housing discrimination complaint: The federal Fair Housing Act prohibits discrimination in mortgage lending. HUD's Office of Fair Housing and Equal Opportunity actively enforces this law. To learn how the Fair Housing Act can help you avoid predatory lending, go to Fair Housing home page.

Contact FHA Resource Center - (Top)

If you are still unsure who can best help you, please email us or call 1 (800) CALL-FHA.

Are you a consumer with questions about...

• Buying a home?
• Qualifying for a loan?
• Predatory lending or fair housing?
• FHA loans?
• Down payment assistance?
• HUD Homes?

You have three easy ways to get the facts!

• Search faq.fha.gov. Our online knowledge base helps you find answers 24/7
• Email hud@custhelp.com
• Phone (800) CALL-FHA or (800) 225-5342 Monday-Friday, 8 am to 8 pm ET,
  TDD: (877) TDD-2HUD (877-833-2483)

For information about credit and credit history, try these:

Federal Trade Commission site at www.ftc.gov/bcp/conline/edcams/credit/index.html. To obtain a free credit report, visit AnnualCreditReport.com