Threatened to refinance or sell home by FDA/USDA?
by Mortgage Rates on Sunday, October 10th, 2010 | 3 Comments
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This is plain FUD (fear, uncertainty, and doubt).
If your friend/client is up to date on his payments, he cannot be forced to refinance. Read the trust deed carefully. Those are usually 30-year contracts that cannot be changed. He is welcome to make payments on existing loan as long as he has continuously met every term and condition of the contract.
Has he never missed a payment?
Has he held continuous property hazard insurance sufficient to cover the mortgage?
Was he 100.0% honest on his loan application and his written/verbal statements to the underwriter?
Has he never missed a property tax payment?
Has he properly maintained his property and met local building code rules?
That letter is either being misinterpreted or is a scam. Contact his federal congressional representative if you think the government is scamming him.
The FDA and USDA are two very different agencies, with very different missions. they have not merged.
USDA offers a guarantee program that assists farmers and people in rural areas in getting home loans. The USDA does not make the loan, but offers a guarantee to the lender that limits the maount of loss that the lender would take if the borrower defaults on the loan.
Information on the program can be found at http://www.rurdev.usda.gov/rhs/. Information on eligiblity for a Rural Housting loans can be found at http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.
If the borrower has missed making their loan payments, they are eligible to request a loan modification. The modification follows FHA modification. No one forces a borrower to take a loan modification. a person that is current has not need of a loan modification.
All FHA loan modification will result in the borrower making less total payments in the future, than if the loan was not modified.
To answer your last question. If the borrower is four or more months delinquent and does not accept a loan modification, then they are in default and the lender, NOT the government can foreclose and take the home from the borrower.
Unfortunately your question lacks to many details to give you a specific answer or how to help.
The FDA is the Food and Drug Administration. The USDA is the United State Department of Agriculture. I seriously doubt that the FDA and the USDA would be combined. The USDA does make or back loans for rural development and home loans.
As other answers have pointed out, if this person is current with his loan payments and is not behind he can’t be forced to refinance. This sounds like alarmist propaganda by the same people who clam the national health insurance will send out “death squads”. A lot of bunk.
The vet needs to get accurate information. He should talk to the bank or financial institution that he pays his loan to for starters. If he doesn’t like that answer he should talk to other people. He should not listen to rumors from people who don’t know the facts and are just repeating whatever scares them. It shouldn’t take much research to get the truth to settle this vets fears.