Homeowners who have mortgages insured or guaranteed by the Federal Housing Administration (“FHA”), Housing and Urban Development (“HUD”), Veterans’ Administration (“VA”), or United States Department of Agriculture – Rural Development Administration (“USDA-RDA”) formerly known as the Farmers’ Home Administration (“FmHA”), are often protected by program regulations which require the lender to work out loans insured by these programs under certain conditions.
FHA Mortgage
Homeowners who have mortgages insured or guaranteed by the Federal Housing Administration (“FHA”) or its successor the Department of Housing or Urban Development (“HUD”) have protections from foreclosure that are not commonly available.
A lender under the FHA/HUD programs cannot begin a foreclosure proceeding until at least three full monthly payments are due. In these programs, the lender cannot foreclose if the only default is the borrower’s failure to pay an escrow shortage in a lump-sum payment. Furthermore, lenders must provide notice of the default no later than the end of the second month after delinquency. The lender must also make reasonable efforts to set-up or hold a face-to-face interview with the homeowner before three monthly installments are due and paid. Under certain circumstances, the lender must accept partial payments. The courts disagree about whether the lender’s failure to comply with these requirements provides the borrower with legal or equitable defenses to the foreclosure action; most courts have held that it does.
Veterans Administration
Homeowners who have mortgages insured by the Veterans’ Administration (“VA”) also have greater rights than homeowners who have conventional mortgages. But, the protections for the homeowners in the VA program are not as extensive as those available to FHA/HUD borrowers.
Lenders may not begin foreclosure proceedings against VA borrowers until the borrower fails to make three full monthly payments.
Lenders are permitted to allow the borrower to reinstate prior to the foreclosure sale by tendering the amount that the borrower is delinquent (including late charges and reasonable, actual foreclosure attorney’s fees and costs.)
Lenders must also provide thirty days notice to the VA of their intention to foreclose. The lender must offer or consider all reasonable forbearance and workout plans including a temporary suspension of payments by modifying the loan by reamortizing or extending the term of the loan. Many lenders will offer VA borrowers to enter into a written payment plan to cure the delinquencies.
The courts disagree about whether the lenders’ failure to follow these VA rules provide the borrowers with a legal or equitable defense to the foreclosure.
Rural Housing Service Mortgages
If your mortgage is insured by the United States Rural Housing Service (formerly the “Farmers’ Home Administration” or “FmHA”), you may be entitled to enter into an agreement to avoid foreclosure. The U.S. Rural Housing Service can be contacted at (800) 793-8861. Your mortgage is probably insured by the USDA/RDA if your mortgage papers or other closing documents refer to the USRDA, FmHA or “section 502 Single-Family Housing Program”
The USDA/RDA also offers payment moratoriums, Delinquency Workout Agreements (“DWA’s”), and protective advances to assist program beneficiaries.
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thank you very much for the info!
i think that the government chooses to ignore the fact that people with gov. funded mgt have rights. i m bening forclosed on and my lender refused to define any rights i had under the program and now i think its to late for us i have also discovered that under the FHA program that i was streamed lined to i should not have been as i was behind on my payments then.
This is a big issue that we are looking at. FHA is definitely in our line of scope. You NEED to USE this as a defense against your lender. FIGHT FOR YOUR RIGHTS!
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as us citizens we in this day and age we have no more rights as the government has turned their backs on every low income family born here and for those of us who do realize this and want to fight back good luck finding a lawyer who will put the selves on the line for you!
I have a home that was given a “false certificate of occupancy” by my county. I have spent all my savings in trying to get an attorney that would sue my General Contractor and Conty. Now, my husband and I have lost our jobs and we have no more saving due to the fact of attorney fee’s. Now, my bank wants to take my home froms me. I would like my family would fall under some “special” type of funds or help from the gov’t. Fraud was committed by both the general contractor and county inspector. Anyone have a clue where I need to turn?
Lisa,
What state are you in…?
If you have a Fraudulent U&O permit and the lender settled using that fraudulent document – check the rest of your lending docs. Chances are they have violations also…
If the U&O is fraudulent – so is the appraisal – so is the LOAN… The loan docs are based upon FRAUD – therefore the loan is not enforcable. However, you do have to be careful construction loans. They have different requirements and exemptions than standard loans. Also, you want to take action BEFORE they sell your loan.
If you Google – Neil Garfield – you’ll find a website called Livinglies… It is a GREAT website to get info AND to find attorney who knows how to deal with these situations.
Good Luck – I hope post isn’t too late. Even if your bank has already filed agasinst you – YOUR LOAN is NOT enforcable if it is based upon fraud.