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Mortgages

Updated reverse mortgage guide: Two things you should know

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More and more homeowners are considering tapping their home equity as they approach retirement age. Getting a reverse mortgage is one way that some older homeowners can do that. Reverse mortgages are a special type of home equity loan sold to homeowners aged 62 years and older, which are repaid when the borrowers sell the home, move out, or die. It’s a complicated type of loan that works best for homeowners who carefully consider all of their options.

Things to consider

Before borrowing, seniors and their families should consider:

  • The cost of homeowners’ insurance and taxes
  • Plans for staying in the home or leaving it to family members
  • Plans for dependents or others living in the home
  • Alternatives to reverse mortgages

Because some important things about reverse mortgages have changed recently, we’ve updated our guide to reverse mortgages.

First-year payout limits

One of these changes limits the amount of money you can draw from your loan in the first year. Borrowers often get into trouble by taking a lump-sum payment early on. It may feel great to get a big payment up front, but borrowers can outlive this money – which spells financial trouble for borrowers who live longer lives.

This limit encourages borrowers to make their money last longer. Borrowers can still take out lump-sum single payments – but this is still a risky choice. Borrowers should strongly consider the monthly payment or line of credit options before choosing to get a lump-sum. These options provide more long-term security than lump-sum payments.

Protections for non-borrowing spouses

Another important change is for couples considering a reverse mortgage. In the past, couples who took out a reverse mortgage loan in the name of only one spouse ran into trouble when the borrowing spouse passed away. When a borrower died, the “non-borrowing spouse” had to pay back the reverse mortgage or move out. Many surviving spouses were surprised to learn this, and lost their homes. With recent changes, a non-borrowing spouse may be able continue to live in the home under certain conditions, even after the spouse who signed the loan passes away. However, the non-borrowing spouse will still stop receiving money from the reverse mortgage after his or her spouse dies.

For couples considering a reverse mortgage, borrowing together makes more sense. If both spouses sign the reverse mortgage, then the surviving spouse can continue to receive monthly payments or use an existing line of credit. It also ensures that a surviving spouse may live in the home after his or her spouse (co-borrower) dies.

These changes help protect reverse mortgage borrowers, but make no mistake—reverse mortgages are still not right for everyone and can be risky and expensive. If you’re considering a reverse mortgage, get the information you need to make an informed decision and give yourself time to weigh your options.

Check out our guide to reverse mortgages for older homeowners and their families.

Updated mortgage data available

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Last year, we released a web-based tool that provides the public with easier access to mortgage data for 2007 through 2012. Today, we’re updating the database with 2013 data, in coordination with the Federal Financial Institutions Examination Council.

What’s HMDA?

The Home Mortgage Disclosure Act or HMDA requires many financial institutions to maintain, report, and publicly disclose information about mortgages. HMDA data for 2013 included approximately 17 million records from 7,190 financial institutions.

Get started

If you’re new to HMDA data, start with our introductory video. You’ll learn about the data, how it’s collected, why it’s useful, and what variables it contains. Then, check out our maps and charts.

Explore the data and do your own analyses. You can start with our suggested filters, and then customize them to fit your needs. Use the summary tables to compare data across state, loan type, and more. Want a chart? You can create a summary table and then download it to create a chart using your favorite software.

Share your findings

We’re excited to see what you do, and encourage you to explore the data. Leave us a comment with your ideas or use #cfpbdata on Twitter to share what you find.

El administrador de negociación del National City Bank pronto se pondrá en contacto con los prestatarios elegibles

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El año pasado, presentamos, junto con el Departamento de Justicia, una queja contra el National City Bank (National City) por discriminación en los precios de los préstamos hipotecarios. La queja alegaba que el National City había cobrado a los prestatarios afroamericanos e hispanos precios más altos por sus préstamos hipotecarios que a los prestatarios blancos con capacidad crediticia similar entre 2002 y 2008. Un tribunal federal ordenó al PNC Bank, que compró al National City en 2009, proporcionar $35 millones en alivio a los prestatarios minoritarios que pagaron en exceso.

El Administrador del Mandato Consentido del National City localizará y enviará cheques a los prestatarios minoritarios que recibieron cargos en exceso. Durante las próximas dos semanas, el Administrador enviará paquetes de información a todos los prestatarios elegibles invitándoles a participar en el arreglo legal. Si usted fue sometido a cargos excesivos y es elegible, usted recibirá un paquete informativo diciéndole específicamente qué cantidad de dinero recibirá por mínimo. La cantidad real de su pago puede ser mayor, según el número de prestatarios que aceptan participar en el arreglo legal.

Envíe su formulario

Los paquetes enviados incluirán un formulario que usted debe firmar si desea recibir su pago. Puede devolver este formulario de participación por correo con franqueo prepago, por correo electrónico o por fax. Simplemente siga las instrucciones del formulario. No olvide enviar su formulario a más tardar el 21 de octubre de 2014. Sólo los consumidores elegibles que devuelven sus formularios a más tardar el 21 de octubre de 2014 recibirán pagos.

Si usted no recibe un paquete informativo por correo antes del 30 de septiembre, y cree que debería recibir un pago, llame al Administrador del Mandato de Consentido de National City al (866) 523-6751 para preguntar sobre su elegibilidad. También puede llenar un formulario de elegibilidad para reclamación y enviarlo por correo, correo electrónico o fax.

La participación en el arreglo legal es gratuita

Manténgase en alerta de estafadores alegando que le ayudarán por una comisión o pidiendo información personal con el fin de obtener su cheque. Cuando un gran número de consumidores recibe dinero de un arreglo legal es cuando a veces aparecen los estafadores. El estafador puede tratar de cobrarle una cuota o de robar su información personal. Si bien usted está en libertad de hablar con un abogado, no necesita contratar a un abogado ni pagarle a nadie para poder participar en este arreglo legal.

Como parte de este arreglo legal, el Administrador del Mandato Consentido del National City, la Oficina para la Protección Financiera del Consumidor, el Departamento de Justicia o su oficina del Fiscal de EE. UU. local podrían ponerse en contacto con usted. Cualquier otro intento de contacto que afirme estar relacionado con este arreglo legal debe ser tratado como una estafa. Por favor, informe de inmediato cualquier estafa al Administrador del Mandato Consentido del National City llamando al (866) 523-6751 o por correo electrónico al: info@NationalCityConsentOrder.com.

¿Tiene más preguntas?

Si tiene preguntas, consulte el sitio web del Administrador del Mandato Consentido del National City o llame al (866) 523-6751.

Obtenga más información sobre cómo puede protegerse de la discriminación crediticia.

National City Bank settlement administrator will contact eligible borrowers soon

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Last year, together with the Department of Justice, we filed a complaint against National City Bank (National City) for discriminating in mortgage loan pricing. The complaint alleged that National City charged African-American and Hispanic borrowers higher prices on their mortgage loans than similarly-situated white borrowers between 2002 and 2008. The parties agreed on a settlement, and a federal court has ordered PNC Bank, which purchased National City in 2009, to provide $35 million in relief to minority borrowers who overpaid.

The National City Consent Order Administrator will locate and send checks to minority borrowers who were overcharged. Over the next two weeks, the Administrator will mail packages to all eligible borrowers asking them to participate in the settlement. If you were overcharged and are eligible, you will receive a package that will tell you the specific minimum amount of money you will receive. Your actual payment amount may be greater, depending on how many borrowers participate in the settlement.

Submit your form by mail, e-mail or fax

The packages being sent will include a form that you must sign if you want to receive your payment. You can return this participation form by postage pre-paid mail, e-mail, or fax. Just follow the instructions on the form. Be sure to submit your form by October 21, 2014. Only those eligible consumers who return their form by October 21, 2014 will receive their payment.

If you don’t receive a package in the mail by September 30 but you think you should receive a payment, you can call the National City Consent Order Administrator at (866) 523-6751 to ask about your eligibility. You can also fill out a claim eligibility form and submit it by mail, email or fax.

Participating in the settlement is free

Watch out for scammers claiming that they will help you for a fee or asking for your personal information in order to get your check. When large numbers of consumers receive settlement money, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. While you are of course free to speak with an attorney, you do not need to hire a lawyer or pay anyone a fee in order to participate in this settlement.

As part of this settlement, the National City Consent Order Administrator, the Consumer Financial Protection Bureau, the Department of Justice or your local U.S. Attorney’s office may contact you. You should treat any other contact claiming to be related to this settlement as a scam. Please immediately report any scam to the National City Consent Order Administrator at (866) 523-6751 or info@NationalCityConsentOrder.com.

Still have questions?

If you have any questions, check out the National City Consent Order Administrator website or call (866) 523-6751.

Learn more about how you can protect yourself from credit discrimination.

Consumer advisory: Don’t fall for a foreclosure relief scam or bogus legal help

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Along with other cases from federal and state partners, today we charged that mortgage rescue scammers have taken $25 million in illegal advance fees from consumers. It serves as a reminder of how important it is to watch out for scam artists trying to take advantage of people who need help avoiding foreclosure.

Federal law bans law firms—except under very limited circumstances—from requesting or receiving payment from you for help obtaining foreclosure relief, such as a mortgage modification, before you’ve signed a mortgage modification agreement with your lender.

In one case, we allege that two companies and their principals offering legal services took in over $19.2 million in fees from over 10,000 distressed homeowners nationwide, with most, if not all, of that money coming from illegal advance fees for so-called loan modification services.

Warning signs

There are red flags that a company claiming to offer legal foreclosure relief help may not be worth your money. Watch for the following warning signs and ask more questions:

  1. Demands for payment upfront. If a lawyer or someone claiming to offer legal help wants to be paid first—before you receive a modification—they may be breaking the law. A licensed lawyer can ask you to pay first but only if the lawyer is licensed in the state where you live or where your house is located. Even a licensed lawyer in your state can only receive up-front payments if they meet other requirements about what they charge for, how they deposit the money, and if they comply with all other state laws and regulations.
  2. Any claim that a modification is guaranteed.Your mortgage company must agree before you can get a modification. A lawyer or someone claiming to offer legal help cannot guarantee you will get a loan modification.
  3. A hard sell. Most licensed lawyers do not call or e-mail you directly and push you hard to pay money right away. If someone claiming to be a lawyer calls you on the phone and asks you to sign papers or pay them right away, ask some more questions to be sure it’s not a scam. Here’s a guide to help you determine if it’s real legal help or a foreclosure scam.

Third party authorization

When it comes to actually getting help with foreclosure relief, your mortgage company may require you to authorize a third party to act on your behalf, so it’s important to know what this means for you. Only authorize a third party that is trustworthy and be careful about exactly what you’re authorizing them to do.

What servicers can do

Foreclosure relief scams are costly for consumers and also impact servicers and investors in the mortgage industry. We’re posting a new model third party authorization form that was developed as part of loan modification scam prevention efforts by representatives from government agencies as well as consumer advocacy groups, housing counselors, and the mortgage industry. The form may be useful for mortgage servicers who can choose to use the form in whole, or in part, by adapting other existing forms. The new model form provides additional questions that will help mortgage servicers build on existing privacy and fraud controls by collecting information that will make it easier for servicers to spot red flags of a foreclosure rescue scam.

We’re training housing counselors on the new mortgage servicing rules

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This year, we established new, strong protections for homeowners facing foreclosure. Since these rules went into effect on January 10, we’ve been focused on helping housing counselors better understand these new federal protections available to struggling mortgage borrowers.

Since last December, we’ve provided on-site and virtual trainings to more than 5,000 housing counselors in more than twenty cities, including Columbus, Orlando, Los Angeles, Las Vegas, Phoenix, and Albany. We also recently held a training entirely in Spanish for Puerto Rico’s housing counseling community.

Find a housing counselor

There are more than 2,000 housing counseling agencies throughout the country, and we can help you find a HUD-certified housing counselor near you. They can help answer questions or address concerns about buying a home, renting, defaults, foreclosures, and credit issues.

Doing even more for housing counselors

If you’re a HUD-certified housing counselor and would like to request training on the new mortgage servicing rules, send us an email.

We also have a guide for housing counselors about the mortgage servicing rules. This is designed to be a quick reference for housing counselors and their work with clients.

Housing counselors can submit a complaint about consumer financial products or services, such as mortgages, online or by phone at (855) 411-2372, on behalf of clients. They can also use the public Consumer Complaint Database to monitor trends in their local marketplace.