| SHARC to take bite out mortgage foreclosures
He's been working for years to pay off his mortgage. 46-year-old Jim Jackson of Minneapolis wanted to eventually leave his home to his four children. But last year, an illness in the family forced him to refinance.
He says, "We needed to take a loan out on the house so we were forced to go to a lender to get a loan and they pushed us into an interest only loan. We had been in the house for 13 years and they stripped us of our equity and everything."
His house payment went from $800 to $1400 to $2100 a month. He was close to losing his home.
Now such victims of predatory lending have a SHARC on their side.
To help residents of north Minneapolis avoid foreclosure, the Minneapolis Urban League and ACORN Housing Corporation today opened SHARC also known as the Sustainable Homeownership and Anti-Foreclosure Response Center.
Home loan refinance goes terribly wrong
Q: I have been frantically searching for help regarding my refinance five months ago. I specifically asked the loan company for a fixed-rate mortgage with no prepayment penalties, with payments between $1,300 and $1,500 a month. My loan officer said that it would be possible. A week later, I received documents from a bank for an interest-only loan with a prepayment penalty. I called the loan officer and he told me to disregard that because he was working on another loan that would be more to my liking. I ended up accepting an interest-only loan, because I was told that the loan I wanted would have insurance requirements. Before I signed the paperwork, I asked what I would be paying per month. The loan officer told me it would be $1,481. Great! About a month ago, I was looking at my payment receipts and saw a negative principal balance of almost $5,000.
Loan problems less severe locally
The rate of mortgage-foreclosure filings rose 14 percent in Berks County from 2006 to 2007, according to the Berks County Prothonotary's Office. Part of the reason why the Berks rate is lower than the 75 percent increase in the rate reported nationally is because of the fiscally conservative mindset here, said Gary Yost, chief executive of the Reading-Berks Association of Realtors. For the most part, Berks lenders remained responsible throughout the housing boom, approving mortgages only to those able to repay them, he said. In turn, most buyers were careful not to purchase homes they couldn't afford, he said. Nationwide foreclosures are increasing mainly among two groups — those who borrowed more than they should have through subprime loans and those with adjustable interest rates that have risen, according to the National Association of Realtors.
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