Second Chance Homes

Second Chance Homes are adult-supervised, supportive group homes or apartment clusters for teen mothers and their children who cannot live at home because of abuse, neglect or other extenuating circumstances. Second Chance Homes can also offer supports to help young families become self-sufficient and reduce the risk of repeat pregnancies. They provide a home where teen mothers can live, but they also offer program services to help put young mothers and their children on the path to a better future. Several federal resources are available to help state and local governments and community-based organizations create Second Chance Homes that provide safe, stable, nurturing environments for teen mothers and their children.

Second Chance Homes programs vary across the country, but generally include:

• An adult-supervised, supportive living arrangement
• Pregnancy prevention services or referrals
• A requirement to finish high school or obtain a GED
• Access to support services such as child care, health care, transportation, and counseling
• Parenting and life skills classes
• Education, job training, and employment services
• Community involvement
• Individual case management and mentoring
• Culturally sensitive services
• Services to ensure a smooth transition to independent living

Perpetual insurance

Perpetual insurance is a type of homeowners insurance policy written to have no term, or date, when the policy expires. From the effective start date, the coverage exists for perpetuity. The insured deposits money, called a deposit premium, with the insurer for insurance for the life of the risk. The deposit is usually ten times larger than the cost of a non-refundable, annual premium for an equivalent policy with a one-year term. The insurer must earn enough income from investing the deposits to cover losses and operating expenses for the model to be economically viable. Upon cancellation, the insured is entitled to a full refund of the initial deposit premium, usually without interest. Perpetual insurance, first issued in the U.S. in Philadelphia in 1752, is still used for fire and home­owner's insurance.

In the United States, there are also tax advantages to perpetual insurance. The deposit premium does not yield any income to the insured. However, the expense of the annual premium for term homeowners insurance is eliminated. Therefore, the tax-adjusted, equivalent rate of return to the insured homeowner on the deposit premium can be calculated by taking the gross amount of money he or she needs to earn to net the amount of an annual premium for a term policy, divided by the amount of the deposit premium. For example, a house which costs $150,000 may typically be charged an annual premium of $1,000 for a term policy. That same house would likely require a $10,000 single deposit premium for a perpetual insurance policy of equivalent coverage. A person in the 28% Tax bracket would need to earn $1,389 in gross income to pay the annual premium. Since that amount no longer needs to be paid annually, the tax-adjusted, equivalent rate of return to the insured homeowner on the single deposit premium would be $1,389, less the after-tax returns that would have been earned on investing the deposit premium (or $600, assuming a 6% after-tax rate of return) divided by $10,000, in other words, 7.89%.

Home Loan Guarantee Program

What is the Section 184 Loan Guarantee Program?

The Section 184 Indian Home Loan Guarantee Program is a mortgage product specifically for American Indian and Alaska Native families, tribes, Alaska Villages or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership in Native American communities. List of Participating Tribes

With a Section 184 mortgage borrowers can purchase a home with a low down payment, no monthly mortgage insurance and flexible underwriting.

* 2.25% down payment requirement for loans over $50,000;
* 1.25% downpayment requirement for loan under $50,000;
* No monthly mortgage insurance
* A one-time, 1% loan guarantee fee that can be added to your financed loan
* HUD underwriters and Loan Guarantee Specialists are familiar with the unique issues and circumstances that Native Americans face when trying to obtain a mortgage in Indian Country.

The Section 184 Loan Provides You With Numerous Options to Suit Your Needs

* Purchase of an existing home
* Construction of a home (stick-built or a manufactured home on a permanent foundation)
* Rehab loans
* Purchase and rehab
* Refinancing (Rate and Term, Streamline, Cash Out)

Getting Started

To qualify for a home loan, its recommended (but it's not mandatory) that applicants first find out if there are homebuyer education classes available through their tribe, housing department and/or in their community.

Homebuyer classes prepare you for the home buying process, so that when you meet with a lender you'll have a better understanding of what it takes to qualify for a home loan.

Common Foreclosure Types of Scams

Here are some examples of scams related to mortgage modification and foreclosure avoidance.

• Foreclosure “rescue” and refinance fraud. The scam artist offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure. You may be told to make mortgage payments to the scammer directly — along with significant, up-front fees — and be told that the scammer will forward the payments to your lender. In reality, the scammer may pocket your money and leave you in worse shape on your loan. The scam artist also may tell you to stop making payments or stop communicating with your lender. Don’t follow that advice.

  Remember that your mortgage lender should be the starting point for finding options to avoid foreclosure. You also should consider contacting qualified and approved credit counselors.

• Fake “government” modification programs. Unscrupulous people may claim to be affiliated with, or approved by, the government or may ask you to pay high up-front fees to qualify for government mortgage modification programs. While government-supported mortgage modification and refinancing initiatives are legitimate, the scam artists’ claims are not. Keep in mind that you do not have to pay to benefit from these government programs. All you need to do is contact your lender or loan servicer.

  The scam artist’s name or Web site may be very similar to those of government agencies. The scam artist may use such terms as “federal,” “TARP,” or other words or acronyms related to official U.S. government programs. These tactics are designed to fool you into thinking the scam artist is somehow approved by, or affiliated with, the government. The government is taking actions to stop this fraud, but you also need to protect yourself. So be wary of claims offering “government-approved” or “official government” loan modifications. Your lender will be able to tell you whether you qualify for any government initiatives to prevent foreclosure. You do not have to pay anyone to benefit from them.

• Leaseback/rent-to-buy schemes. In this type of scam, you are asked to transfer the title to your home to the scammer, who will, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back. If you do not comply with the terms of the rent-to-buy agreement, you will lose your money and face eviction. The agreement may be very hard to comply with, because it may require, for instance, high up-front and monthly payments that you may not be able to afford. In fact, the scammers may have no intention of ever selling the home back to you. They simply want your home and your money.

  Remember that transferring your title does not change your payment obligations — you will still owe your mortgage debt. The difference will be that you will no longer own your home. If payments are not made on the mortgage, your lender has the right to foreclose, and the foreclosure and any other problems will appear on your credit report.

• Bankruptcy scams. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case. Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure. In addition, bankruptcy will negatively impact your credit score and will remain on your credit report for 10 years.

• Debt-elimination schemes. Scammers may claim to be able to “eliminate” your debt by making illegitimate legal arguments that you are not obligated to pay back your mortgage. These scammers will provide you with inaccurate claims about applicable laws and finance, such as that “secret laws” can be used to eliminate debt or that banks do not have the authority to lend money. Do not stop making payments on your mortgage based on their claims.