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November 2007

Welcome To AmeriDream’s Newsletter

In This Issue:

  • Ask AmeriDream
  • House OKs mortgage protections
  • U.S. Senators Still Debating FHA Reform
  • Homebuyer Ed 101

Q: What is the status of AmeriDream's lawsuit vs. HUD and the agency's proposed rule that will eliminate down payment assistance?

A: There have been two significant events with regard to HUD’s proposed rule.

First, HUD voluntarily agreed to defer the effectiveness of the Regulation, as to AmeriDream only based upon the agreed to court schedule. 

Second, the judge presiding over this litigation issued an injunction preventing the regulation from taking effect and stated that AmeriDream's arguments that the Regulation violates the APA are, "substantially likely to succeed on the merits." 

As the Gold Standard for down payment assistance, AmeriDream remains committed to continue to fight the HUD Rule and to continue its mission to help individuals and families that are in need of a DPA program. AmeriDream also remains committed to keeping you aware of the latest news and information regarding the HUD Rule on DPA. Please check www.ameridream.org for the latest information

The House of Representative approved legislation November 17 to strengthen consumer protections for mortgage borrowers as Congress seeks to curb the lending abuses that contributed to the mortgage crisis.

The measure would require lenders to ensure potential borrowers have the ability to repay their mortgages and strengthen oversight of mortgage brokers. It now goes to the Senate.

The measure is part of a broader effort in Congress to curb foreclosures, strengthen consumer protection, and restore confidence in the credit markets after the mortgage meltdown.

Senate leaders are still debating a measure to reform the Federal Housing Administration. Reforming and modernizing the FHA has become a major priority of the fall session. Key components of the debate will focus on increasing the FHA loan limit to $417,000 (the conforming loan limit) and lowering the FHA downpayment requirement from 3.0% to 1.5%.

Currently, FHA requires a 3% down payment and many homebuyers (40% of all FHA-insured mortgages) have overcome this barrier by using funds provided by nonprofit organizations. Over the past decade, these nonprofits, such as AmeriDream, have helped nearly one million families become homeowners and 94% have had a successful homeownership experience.

Increasing FHA’s loan limits for high cost areas and stretching loan terms to make mortgages even more affordable will help restore the program’s battered image and help millions of low to moderate income homebuyers with better mortgage options.

Homeowners can prevent foreclosures
It’s estimated that over 2 million mortgage holders could default on their loans and lose their homes over the next year. The last thing any homeowner wants to go though is a foreclosure. When a house is foreclosed, the homeowner loses their home and any equity they may have built, plus their credit can be destroyed for several years.

There are ways that homeowners can reduce the prospect of becoming a victim of foreclosure.

Don’t ignore the problem
The further you fall behind, the harder it will be to catch up. Open and respond to all mail from your lenders. The first notices most likely will offer good information about foreclosure-prevention options. Later mail may include notices of pending legal action. Failure to open mail isn’t an excuse in court.

Talk to Your Lender
If you’re having trouble covering your mortgage, talk to your lender as soon as you start having financial problems. Lenders don’t want to be property holders. They would prefer to help you work out a solution so that they can get their money back. Go to your lender with a payment plan offer. Show the lender that you want to make it work and that you’ll pay as much as you can. That will give you a lot more credibility with the lender. The sooner a homeowner contacts a housing counselor or attorney, the better their options are.

Read Your Mortgage, know your rights
Go through your mortgage documents and read every page to understand what you have legally agreed to do. If you need help understanding it, call a housing counselor or attorney.

If you have an adjustable rate mortgage, verify how the rate is calculated. Determine your financial strategy for how you will pay when the rate changes.

Shop around
Lenders are closing up shop, sometimes literally overnight. It’s important for first-time borrowers, and borrowers looking to refinance to have a backup finance plan. Take the time to do comparative shopping. Talk to banks and mortgage companies.

Prioritize your spending
After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment.

“The AmeriDream program is awesome. I believe this is a great resource for helping people buy a home. I love this program and I hope it continues.”

Chuck, Dallas, TX

Two mothers and two daughters were fishing. They managed to catch one big fish, one small fish, and one fat fish. Since only three fish were caught, how is it possible that they each took home a fish? 

- Solution is located on the bottom of the page -

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The fishing party consisted of three people. A grandmother, a mother, and a daughter. The mother is both a mother and a daughter.