Consider This Before Choosing The Usda To Finance Your Loan

There are certain rules that apply to rural homeowners that have dealt with the U.S

. Department of Agriculture for their housing needs. While it is important for private firms to get the court's approval before they can go forward with obtaining an overdue debt, the same rules do not apply when it comes to the USDA. The agency is authorized to seize funds, sometimes even before a foreclosure has been completed. This can include all types of government benefits and tax refunds.

According to the current federal guidelines; up to 15% of your social security payments as well as 15% of your take home pay is at risk when the USDA comes looking for their money. It can also be responsible for charging up to 28% or more when it comes to collection costs. Once the foreclosure process comes to a close the USDA can still come after you for unpaid balances. Even in the states where this type of action is limited with private lenders, the USDA still has power.

Many people are fighting back against the USDA's ridiculously tough standards mainly because they are unhappy with the way the agency goes about collecting a debt. The customer base of the USDA are low income, rural homeowners that have been hit the hardest by the nation's debt crisis, housing crisis, banking crisis and wall street ballouts. People say the behavior of the USDA is like 'pulling blood from a stone' by ykeeping these practices so strict.

Some other advocates have also said that the U.S. USDA's standards are ridgid, they cannot bend the rules like a private farm lender could. If you wish to make modifications to your mortgage, you had better go with a private lender. Restrictions are a plenty when it comes to working with the USDA on your home loan.

If you are able to get a direct loan you may be given a break from loan payments, within the limits set forth by the lending institution. This may result in you paying more in the long run, or making higher payments due to the unpaid balance being added to the current balance due. This could leave some in a sticky situation!.

Of course the USDA justifies it's collection practices by saying it is "legally required" to do so under the Federal Debt Collection Improvement Act of 1996. This act is in response to all of the charges that were put into place by the regulators since current rules were considered to be too lenient on borrowers who are delinquent with their payments.

Please educate yourself on all the options that are available to you before you buy a home or refinance a mortgage. Did you check with your local credit union? Have you visited a banker in your town? Have you looked online? There are low interest deals to be had right now!. With rates as low as 3.5% it's a good time to think about refinancing if you plan to stay on your land for awhile. This way you will have a lot more choices when it comes to getting a good deal on refinancing your home's current mortgage.

Copyright (c) 2012 Farm Credit Services of Mid-America

by: Darren Lynn

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