• 64°

Law holds up FHA loans for some stuck in subprime mess

By Paris Goodnight
Salisbury Post
A local mortgage broker is warning that a new state law designed to stop predatory lending could also prevent some N.C. homeowners from refinancing and saving their homes.
Brad Randall of HRC Associates Inc. says he is trying to help more than a dozen local residents participate in the FHASecure program approved by Congress. The federal program aims to help people who financed their homes with expensive, “subprime” loans whose payments increase dramatically over time.
In addition to giving subprime homeowners a fixed-rate mortgage, the federal bailout program pays a number of the insurance fees that protect mortgage lenders, fees normally paid by the homeowner.
But Randall said the way North Carolina law now counts those fees, it makes the overall mortgage package higher than a certain trigger allows, meaning homeowners can’t meet the requirements.
Randall said none of 19 clients he’s currently dealing with in Rowan County would be able to qualify for Federal Housing Administration bailout loans.
He said other states have passed similar legislation but exempted FHA and Veterans Administration loans. He spoke with members of the Mortgage Bankers Association on Thursday night and they agreed North Carolina would have to exempt FHA and VA loans to make the program work.
Randall gave an example of someone owing $120,000 with an original loan seeking to refinance. The borrower could save $100 a month in payments under a lower fixed interest rate, but the total new loan package might rise to $120,500. Randall said the trigger takes all fees into account, no matter who is paying them, and would bump out the new loan.
“They’re (the borrowers) not paying the fees. Someone else is paying for them,” Randall said.
Randall said the bill gives the N.C. Commissioner of Banks leeway to waive the additional requirements for the bailout homeowners.
No one else contacted by the Salisbury Post said they knew of any problem with the N.C. predatory lending law.
Rep. Lorene Coates said she hadn’t heard of any concerns with the bill, but she said if wording needs to be changed, it could be done during the next session of state lawmakers. That doesn’t come until May.
A representative from bill author Dan Blue’s office said Thursday that no one had contacted them about any trouble with the law, but representatives from N.C. Justice Center continue to deal with home foreclosures and bring it to lawmakers’ attention.
The issue is a continuing one that lawmakers are well aware of, and Blue and Rep. Walter Church co-chair a committee that is holding a public meeting Feb. 26 at 12:30 p.m. in Raleigh on the new law and other issues facing homeowners. You can e-mail danb@ncleg.net with any concerns.
An official with the Housing and Urban Development office in Washington was checking on North Carolina’s situation but hadn’t returned a message by Friday.
In the meantime, Randall said, “I’ve got brokers down to Charlotte trying to get around it. But there’s no way to do it,” he said.
Compliance review companies are paid to look over FHA loan documents, and if they follow the summary to the letter, all Randall’s clients will be out of luck. He mentioned laid-off Freightliner workers, those displaced when textile mills closed down and veterans returning from the warfront.
It’s not stopping him from working. He said he’s trying to keep it business as usual in his office ó and hopes that someone in the Legislature or banking office can offer his clients some relief.
Contact Paris Goodnight at pgoodnight@salisburypost. com or 704-797-4255.

Comments

Comments closed.

Nation/World

Biden team readies wider economic package after virus relief

Nation/World

Spacewalking astronauts prep station for new solar wings

Nation/World

Cuomo sorry for remarks aide ‘misinterpreted’ as harassment

Nation/World

Trump calls for GOP unity, repeats lies about election loss

Education

Rowan County administers 700 vaccines, with majority going to local educators

Crime

Shoplifting at Walmart presents challenge for Salisbury police

Local

Commissioners will hear details about changes to solar energy policies

Business

After overcoming obstacles, local barber Daniel King earns registered status

Lifestyle

39th annual K12 student exhibitions go virtual

Business

Biz Roundup: Chamber of Commerce to host ‘Salute to Agri-Business’ at March Power in Partnership

Local

Local legislators back bills ranging from new restrictions on sex offenders to Holocaust education

News

After surviving COVID-19 scare, Lois Willard set to celebrate 100th birthday

High School

Carson rolls over South 41-0 as about 600 allowed in to see season opener for both

Education

East Spencer after-school program looks toward opening, nonprofit status

Lifestyle

Frank Ramsey inducted into the NC Military Veterans Hall of Fame

College

Livingstone’s Stoutamire inducted into 2021 CIAA Hall of Fame

Nation/World

J&J’s 1-dose shot cleared, giving US 3rd COVID-19 vaccine

Coronavirus

13 deaths reported in Rowan, county stresses need to receive second dose

Coronavirus

10% of Rowan residents receive first dose; eight COVID-19 deaths reported this week

News

North Carolina State Highway Patrol commander to retire

Education

UNC School of the Arts may go for online learning due to COVID-19 spread

Coronavirus

Greensboro site to administer 3,000 daily vaccine doses starting March 10

Nation/World

Update: $1.9 trillion relief bill passes House, moves on to Senate

Nation/World

Lady Gaga’s dogs recovered safely