Mark Miernicki, the guy in the picture above, contacted Whistleblower as part of his vigorous campaign to hang onto the house he has lived in for 17 years. I told his story in my Sunday column (I’m only getting around to telling blog readers about it now because I was out of the office Monday and Tuesday - hence the deafening silence on the blog. Whistleblowers need a break sometimes, too). This story was my introduction to that exotic financial “product” called a negative-amortizing loan, sometimes described as a “pick-a-payment” or “payment-option” adjustable rate mortgage. Unlike conventional mortgages, in which you pay a bit of the principal each month, the principal in these loans actually goes up each month. The FDIC fact sheet on these kinds of loans warns of a syndrome called “payment shock.” “Your payments may go up a lot–as much as double or triple–after the interest-only period or when the payments adjust.”

Free counselors are standing by to help homeowners who see foreclosure looming, and those counselors can actually get situaadvises Jean Stanley of the Carver County Community Development Agency. They include the Minnesota Home Ownership Center and the U.S. Department of Housing and Urban Development. These counselors have ways to getting situations like Miernicki’s fixed, she told me.

“Either of these sites can direct homeowners to valuable – FREE – services and agencies that can advise on foreclosure and homeowner rights in Minnesota. Do not delay, there is – FREE - help available,” Stanley wrote to Whistleblower. “Please also warn folks about foreclosure scams – DO NOT agree to pay any firm or agency for loan modification or foreclosure prevention – that is illegal in Minnesota. Again, seek out a HUD certified – FREE – housing counseling agency.”

This entry was posted on Wednesday, June 24th, 2009 at 12:01 pm and is filed under Businesses in hot water, Property problems, Scams. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.