Update: Habitat for Humanity mortgages in default, but debts remained constant after sale

- A dozen mortgages held by Habitat for Humanity’s Hillsborough chapter were in “significant default” when they were sold to Southeast Property Acquisitions in June, but the amounts owed by the homeowners did not change, according to John Anthony, an attorney for the private investment firm.

FOX 13 spoke to Mr. Anthony after some of the homeowners complained their debt payments seemed to go up after their mortgages were sold. Anthony explained that the amounts owed by each homeowner remained constant - both before and after the sale.

Homeowners also complained that Habitat failed to notify them that their mortgages were being sold.  Habitat Hillsborough C.E.O. Tina Swain told FOX 13 Tuesday night that the failure to notify the homeowners was an “administrative error.”

Swain also addressed reports that the sale may have violated Habitat International’s policy of only selling to regulated financial institutions, such as banks. 

“Before this event, we were unaware of this limitation,” said Swain, but “moving forward we will only sell mortgages to regulated financial institutions.

Habitat says it regularly sells mortgages to raise money for its charitable endeavors, allowing the organization to “serve more families in need of an affordable mortgage,” explained Swain.

Swain says Habitat is working on several options to keep the families who fell behind on their mortgages in their homes. 

“We work with every homeowner who becomes delinquent to find a solution that keeps them in their home”, said Swain. “Unfortunately, if they ultimately can't pay, it could result in foreclosure proceedings."

But it doesn’t have to, according to attorney John Anthony. The SPA attorney says the homeowners have the same options as all homeowners when facing the consequences of default.  

One of those options is bringing their accounts current, and Anthony says a third of these homeowners have done that.

Anthony told FOX 13 News, “SPA invests in various real estate ventures” and “every aspect of this transaction is reasonable and appropriate.”

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