So the Feds Are Bailing Out the Banks
Wednesday, April 9th, 2008 07:58 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rolanniAs you know, Bob, the Federal Government is working like a lunatic thing to shore up the mortgage industry. You may have asked yourself, as I have, where they're coming up with the money in these lean times, having already spent every dime in the treasury.
Well.
Let me tell you a story.
Eighteen years ago, Steve and I "bought a house" as the saying goes. What we actually did, of course, was Acquire a Mortgage. Because we live 'way out in the country, we got ours with what was then called the Rural Housing Service of the federal government.
This mortgage has many idiosyncracies, as you might expect from a government program. For instance, payments are tied directly to income-before-expenses, reviewed annually. Every year, I get to educate a new "counselor" on the realities of freelance incomes. Also, because of the income-before-expenses side of things, it's a little hard to, how shall I say this, save money. But, hey, it's our mortgage, and no one else was stoopid enough to take on a couple of freelancers, so we love it for the ugly child it is.
Yesterday, we got a letter in the mail from Rural Housing, which now sports some highfalutin alphabetsoup name. We have...
...wait for it...
We have...
90 days (from the date of the letter) to refinance our house
Yes! On top of everydamnotherthing we have to do before June 1, now we have to figure out how to refinance an elderly raised ranch located in the heart of Central Maine in the middle of a housing slump.
Because, yanno, the government needs money. NOW.
...if you want me for any little thing, I'll be hiding under the bed.
Well.
Let me tell you a story.
Eighteen years ago, Steve and I "bought a house" as the saying goes. What we actually did, of course, was Acquire a Mortgage. Because we live 'way out in the country, we got ours with what was then called the Rural Housing Service of the federal government.
This mortgage has many idiosyncracies, as you might expect from a government program. For instance, payments are tied directly to income-before-expenses, reviewed annually. Every year, I get to educate a new "counselor" on the realities of freelance incomes. Also, because of the income-before-expenses side of things, it's a little hard to, how shall I say this, save money. But, hey, it's our mortgage, and no one else was stoopid enough to take on a couple of freelancers, so we love it for the ugly child it is.
Yesterday, we got a letter in the mail from Rural Housing, which now sports some highfalutin alphabetsoup name. We have...
...wait for it...
We have...
Yes! On top of everydamnotherthing we have to do before June 1, now we have to figure out how to refinance an elderly raised ranch located in the heart of Central Maine in the middle of a housing slump.
Because, yanno, the government needs money. NOW.
...if you want me for any little thing, I'll be hiding under the bed.
no subject
Date: 2008-04-09 02:23 pm (UTC)*IF* I am right -- and that's a big if -- you must make a good faith effort to find new financing. (This is why they want to see the rejection letters. And the letters can't be rejections for, say, lack of documentation).
If you truly can't find other financing you may be able to keep the RHS/USDA loan, but expect this cycle to repeat every year.
I'd suggest making a copy of the letter and keeping it with you. Make copies of your tax forms, too. Check with local banks so you can start collecting those rejection letters, and I would also check with the Maine Housing folks for advice.
If the dayjob has a credit union, see if you can get anything through them. You may not have been there long enough.
Also, many day jobs have some kind of employee assistance program -- called many different things. Sometimes these are run in-house, sometimes they are outsourced and it's an 800 number you call for advice. Depending on the program, it may provide some hours of free legal assistance. Check with whatever your day job calls "personnel" or "human resources".
If you make the effort and can't get a loan, and RHS still won't let you keep their loan, you may be able to appeal. This site ( http://www.ruralhome.org/pubs/guides/appealing/appealing.htm
) has some info on the appeals process, although they are somewhat more focused on people developing low income housing than the individual owner.
You might also want to consider using the resource of your federal congresscritter or senator -- whichever one you find most tolerable. However, doing as much as you can on your own first is generally a good idea. Then the congresscritter is helping a constitutent who is following the rules but being bullied by the big, bad federal agency....they like that better.
As I said, if I'm right about the trigger for this, then even scraping past it this year might only be buying you time. If the dayjob alone would not be enough to trigger a problem, you may need to look at restructuring your finances long term. (For instance do Saltation donations count toward that income-before-expenses, with the eventual cost of printing the books not considered at all?) But for that you would need specialized legal/accountant advice.
And perhaps, perhaps there will be an unexpected good outcome of this. You may have enough equity in the house that you could refinance with a new long term loan and end up with more predictable payments. A lot will depend on your age, how many years you are planning to work at the dayjob, what kind of income you would have in "retirement", etc. Ask around at work for people's suggestions on the best local loan person, then go to them and see what kind of loan they could offer.
Please keep all your readers updated and let us know how we can help.
--Susan