There is a lot of controversy among the American people today about the housing crisis. Walk into any coffee shop or join any financially related blog or forum online and you will quickly find that there are people that are very angry with the foreclosure mess. With the government trying to help so many lenders who have fallen into difficulties with their home mortgages, and FHA guarantees being made for some of the more controversial loans ever, there is a lot to be concerned about.

Some people believe there should be no handouts to those borrowers who took on too much of a home, or did not keep up to date with their mortgages for other reasons. Others believe that extending a helping hand to those in need right now will strengthen the overall housing market and therefore help keep everyone’s house values from plummeting even further. Still others believe this type of correction has been long coming.

Regardless of this, there are plenty of victims out there of loan fraud. It was especially prevalent during the last few years when brokers, everyone, and their brother it seems were contacting home loan holders and encouraging them to refinance. Lower interest rates, better terms, or the ever important “lower monthly payment” are just some of the sales pitches. To the uneducated or those that simply did not know better, these loans seemed like good opportunities and so they refinanced. They got into adjustable rate mortgages they could not pay once they reset.

Avoiding Loan Fraud

No matter whose fault it is or was there are definitely those preying on them. The good news is there are several things you can do to keep yourself from making the wrong decisions about your loan in the future.

• Look into local homeownership education courses, which are available to you through HUD or other approved agencies.
• Find a trusted real estate agent not trying to sell to you but able to help you really understand all of your options. References from other satisfied customers are always beneficial.
• Always have a home inspector that is working for you do your appraisals. Even if the lender has a professional do the work, have an independent organization help you as well. You want to know the true worth of the property
• Do not fall for false statements: the lender has to be as thorough with the information as you ask them to be. Every single piece of paper that is given to you must have your signature only if you fully understand it. Have an attorney, working for you, by your side.

Mortgage fraud and loan fraud are running rampant. Do not put yourself at risk. Be educated and avoid the pitfalls that may come down the line.

In the recent news is a lot of information about the subprime markets, the worries about foreclosure, but if you are current on your mortgage or have less than perfect credit and want to buy a home, where does that leave you?

I admit, the news of late especially with Congress trying to pass a bill to help move the housing market along is interesting and it has consumed some of the headlines. However, let us not forget that we are moving into the largest house buying time of the year: spring and summer. People move much more often in the summer months mainly because the weather is nice and the kids are out of school. If you are considering it, you may be consumed with worry about your less than perfect credit.

The housing market “crash” and the “credit crunch” are worrying plenty of people who want to be in a home. Some are staying in rental opportunities longer now than they would have just a few years ago. That may not be necessary. In fact, there are some outstanding opportunities for people to get into homes right now.

Avoid Subprime

With the fall of the subprime lenders, you will find it more difficult than ever to find a lender willing to loan to someone that has a low credit score. Rightly, so some people with credit scores that are too low will not be able to find any type of lending opportunity even from the FHA. Yet others, who will fall somewhere in the middle may find a lender.

FHA is able to help those with spotty credit scores to get into a home. They offer loans that do help consumers working on improving their credit, with proven income and employment. There is no doubt that you may pay a bit more for a loan this way through some lenders, yet the FHA programs do offer help to those looking for a way to prove themselves.

You will need to prove yourself to the Federal Housing Administration, though. To have approval for an FHA loan, you will need to provide details of your income, back records, paycheck stubs and anything else that can prove that you are a viable applicant. The FHA is not in the business to secure too risky loans, and these checks help to insure that is the case.

Is This New?

You may believe that this is something new that the FHA programs are doing. That is not the case. In fact, the FHA has a strong history of stepping up to the plate whenever there is a housing scare in which lenders are no longer willing to provide as flexible of loans as they used to.

An example of this happened in a recession during the 1980’s when many of the Texan housing markets fell drastically because of the oil situations there. While lenders reigned in their lending abilities or willingness, the FHA stepped right in to help stabilize the industry. In fact, the very foundation of the FHA is that of helping to establish home ownership in the United States (it was created during the Great Depression to help people buy homes.)

I highly recommend if you are in a situation where you have a good income history and can afford a mortgage, but are worried about shaky lenders, to use the FHA to help you get the home you want. You do not have to wait for a better market, especially when a number of opportunities like low priced homes are available. While the FHA cannot help everyone searching for a home with bad credit, it is able to help many that need and deserve an opportunity.

While I was perusing Google for the latest FHA information, an article that mentioned reverse mortgage scams caught my eye. Although this particular article had very limited information, I did a little digging and found an excellent article for avoiding reverse mortgage scams by Tim Paul at Ezine Articles. The 5 scams he details are:

He gives a thorough description of each scam, including media reports of specific instances, and offers precautions for each situation. The article is a few years old, but it is just as relevant as if it had been written today.

I was shocked to hear that a public service announcement was in use as a way of letting people know that it is illegal to discriminate against others who want to borrow money to buy a home. Really, this is 2008 and perhaps it is a bit naive to think that this is something that is finished. The fact is, the law is clear. You should not be discriminated against for any reason, especially your race, your religion, your familial status, your national original, your color or a disability.
What Is That About?

HUD announced that it was putting in place a public service announcement that would begin airing throughout the country on television as well as radio. The goal is to educate minorities of their right to own a home. According to the official press release out of the U. S. Department of Housing and Urban Development, the service announcement will feel Denis Haysbert, who you may know better as President Palmer on the television show “24.”

Here’s how the public service announcement will play out, according to the press release, “The PSA shows Haysbert, sitting in a café, drawing his dream home on a napkin and explaining that it is illegal to discriminate in lending because of someone’s race, color, national origin, religion, sex, familial status, or disability. The PSA ends with the tagline “HUD – One Call. Many Answers,” and encourages people to call HUD’s fair housing hotline, 1 (800) 669-9777, or log onto HUD’s Web site, www.hud.gov/fairhousing, if they believe they have experienced lending discrimination. “

Discrimination in Lending

If you feel that you have been discriminated against, now is the ideal time to step up. Even more so, if you feel that your lender is not doing enough to help you get into the right mortgage for you, I urge you to take action. FHA is an ideal program for those that are low income but able to make home mortgage payments. It is also an ideal way to get out of those subprime loans.

According to the press release, African Americans and Hispanics receive less information regarding the loan terms as well as often charged a higher fee. They are often told not to apply for the loan. Legally, it is unlawful to do these things. If they are happening to you, the Fair Housing Assistance Program can help you. You can contact them at 800 669-9777.

If you are struggling with a lender, give them a call. Alternatively, contact a lender that is willing to work with you. While there is discrimination out there, it does not come from all lenders.