Nations Community Bank NCB is planning to purchase delinquent Federal Housing Administration FHA mortgages and get them back on track

This move is expected to provide relief to struggling homeowners who are facing delinquency issues due to the pandemic and the economic downturn. NCB plans to use federal resources provided through the Neighborhood Reinvestment Corporation’s (NRC’s) FHA Delinquency Assistance Program (FDAP) to purchase these delinquent mortgages from lenders. It will then work with homeowners to restructure the loans and get them back on track for eventual repayment.

The FDAP program was recently established by the NRC to help create more affordable mortgage payments for borrowers with FHA loans who have become delinquent due to events such as the pandemic and economic downturn. The program is funded by a $2 billion loan from the Department of the Treasury and is intended to help FHA holders avoid foreclosure and assist with loan restructuring. NCB has already received approval to access the funds and is now prepared to purchase delinquent loans through the program.

NCB plans to use the funds from the FDAP program to purchase delinquent FHA mortgages from lenders, and then work with homeowners to modify their loan terms. This may include lowering monthly payments, extending the loan term or changing the interest rate. The bank also plans to offer counseling and support services to borrowers to help them understand their options and create an affordable payment plan. There is no cost to borrowers for any of these services. After the loan is modified, the bank will offer a refinancing package that will enable the borrower to pay off their loan in a timely manner.

In addition to the FDAP program, NCB also plans to offer a variety of additional products and services to help struggling homeowners. This includes FHA loan modifications, home equity conversion mortgages (HECM), short sales, deed-in-lieu, and principal reductions. NCB also plans to provide financial educational seminars and workshops to help borrowers understand their options and make informed decisions about their mortgage.

The FDAP program and NCB’s other services are expected to provide much needed assistance to delinquent borrowers. By purchasing the delinquent mortgages and offering loan modification and refinancing options, NCB is hoping to get these loans back on track for repayment and provide struggling borrowers with a more affordable monthly payment. NCB’s additional products and services, such as HECM, short sales, and principal reductions, are intended to provide further relief to borrowers who are facing foreclosure. Through providing education and support, NCB aims to empower borrowers to make informed decisions about their mortgage that are best suited to their individual needs and financial situation.

This article was contributed on Oct 20, 2023