HELENA, Mt. -Laverl "Nick" Nicholson used to look out the kitchen window of weeping willows which mark the burial of two of his two daughters. Then a debilitating car wreck left unable to pay the amount of $220,000 to be at his home in northwest of Montana.
He tried for a year and a half to lower their mortgage payments through a loan modification, but Government-insured loan that he has taken three years ago has come with limitations. The best that the Bank could offer her was a reduction of $124 per month, leaving a payment of $ 1,585 that he could not always means of Nicholson.
The Bank foreclosed last April, forcing them to move aside in a mobile home on two of 10 acres property initially that he gave his daughter a few years before.
Despite extensive Government prevent seizures by changes in the mortgage, situations like Nicholson became common. Loan modifications are often working because the owner does not understand what is happening, the lender is unwilling to write off the coast of the portion of the loan or, as here, the conditions of a loan from Government-back limit what the Bank can offer a borrower.
Today, the House near the town of Thompson Falls is sold in a bid process sealed by the Ministry of housing and urban development. Asked the price: $87,000.
Nicholson, 50, was angered to see something, dear announced this at a great price.
"I was a blue collar worker my life and I worked hard for what I had." For that it is pushed out there for this award and our family not given first option..., "Nicholson suspended." "Things are not supposed to be this way in America." A man is not supposed to lose her home $ 220,000 to sell for $87,000 "."
Nicholson, like many Americans, was drawn to the Federal Housing Administration loan to refinance his house, because he gives good terms as a percentage of 3.5 downpayment. He used the $268 he borrowed against his home to invest in his business as a contractor in maintenance of sawmill working in the Northwest and across the country.
But with the car accident in 2008 which breaks two vertebrae in the neck and pre-existing degenerative disease in his back, he becomes unable to work. He begins to Miss mortgage payments, and the organization that has linked his company discovered his delinquency, causing him to lose his bond and his company.
Foreclosure started and it has become necessary for Nicholson to seek relief for the mortgage, but FHA loan modification conditions were limited. Wells Fargo loan officer could not offer him a 5.375% interest rate, rate continuous market, and unlike its mandate non - FHA loans may be extended for 30 years instead of 40 years.
Supply would be declined payments Nicholson 1,709-$ 1,585.71. He requested additional relief which would have lowered his payments less than $1,000 per month. He has been denied.
"I'm lost." I am a person of mechanical type, said Nicholson. "My knowledge in this area is not good." I therefore on what I said. »
Wells Fargo spokesman Tom Goyda said that the Bank followed FHA guidelines offering Nicholson, a loan modification.
"We have worked for more than a year to prevent foreclosure." "Available under FHA guidelines we were unable to find an option allowing him to remain at home at a price he could afford," said Goyda. "At that time, he did y no alternative left for modification."
Wells Fargo had already sold mortgage Nicholson by Ginnie Mae, the Government National Mortgage Association, an investor who buys these titles, such as a mutual fund or a pension fund. When Home foreclosure, Wells Fargo bought the loan to pay the unpaid balance investor.
The Bank has filed a claim with the FHA provides insurance on loans made by approved lenders. FHA refund Wells Fargo for principal unpaid $ 220,000 and approved expenses.
Who left the Federal Government to unload the House for about one third of the unpaid principal from Nicholson.
"Who will eat the difference between $220 and $87,000?", said Julie Hope, an adviser for NeighborWorks Montana, a group of non-profit housing help Nicholson. "The lender of out of it because they have turned in their claim on it and received their money".
FHA says it costs the taxpayers nothing because just money used to pay claims payments of mortgage insurance by homeowners who borrow part of the program.
FHA has paid approximately $ 12.8 billion on 100 000 of these claims seized homes by 2010, an average of $128 000 per application, said the spokesman for the Department of housing and urban development Lemar Wooley.
The previous year, FHA paid 70,000 claims at an average cost of approximately $117 million, for a total of nearly $ 8.2 billion.
Loans have become very popular in the past four years, maximum of 2 per cent of the volume of the mortgage in 2006 to approximately 30 percent industry today.
FHA loans have a lower rate of foreclosure that loans non - FHA. At the end of the third fiscal quarter of 2010, all loans foreclosure rate of 4.39% compared to 3.32% to the FHA loans Wooley said, citing data from Mortgage Bankers Association delinquency.
Wooley said banks may simply prohibit someone with an FHA loan to save themselves the hassle and the possible monetary loss of a loan modification. FHA-approved lenders are required to try to help borrowers avoid foreclosure or face sanctions, he said.
"Lenders who committed no loss mitigation and a claim will be paid by HUD are subject to administrative measures, including sanctions of three times the amount of the debt paid to the lender," says Wooley.
But that will make easier for borrowers like Nicholson trying to wade through their options with a delay of foreclosure hung on them.
"We encourage Distressed borrowers to come into contact with an organization approved by HUD counseling as soon as possible in the process," said Marietta Rodriguez, national Director of NeighborWorks America to the home ownership and lending.
Nicholson and NeighborWorks study if it was viable wrongful foreclosure claim, but he primarily wants to leave the Word as a warning to others who may also be switching on the verge of bankruptcy.
However, he hopes that he could see her daughter and her husband, one day move into the House where she grew up.
"I would never go back into the House, but it would be nice to have my children near me." Finally, my health is going to give and I will be in a wheelchair. It would be nice to have them close to help, he said.
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