photo credit: House Committee on Education and Labor

Consumer protection sounds good, we all want protection from those hidden charges and one sided terms. The legislation seems to tip the scale a bit towards the consumer. The new consumer protection law comes with several mortgage rules that may make it harder to obtain a home loan, but it may keep things more responsible, at least thats how the bill reads.

One point that jumps out of the Bill is requiring additional mortgage disclosure, which means that lenders must disclose the maximum payment a borrower could potentially pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes. This is the culprit that got many people in trouble not too long ago. There is a lot of language in the Bill that makes lending a lot stricter; however, we need to be a lot more responsible. We simply cant take on loans we cant repay.

The way the Bill reads is that banks and lenders must verify an applicant has the means to repay the loan, and if they lend to an unworthy borrower they are penalized to the tune of three years of interest payments and damages caused to a homeowner who cannot pay their mortgage due to the fact that they shouldnt have had a loan in the first place. The Bill seems to lean on the lenders quite a bit, forcing compliance and full disclosure. Can this keep us out of trouble? Only time will tell.

Read the full story from RealtyTimes

Posted in Mortgage, Blogging, Real Estate Market Conditions, Real Estate Industry, Real Estate Industry Trends, Gen X-Y

Comment on this article

Name

Email
Your email address will not be displayed.

Site/Url
Your URL will be displayed.

Your vote

Poor Excellent

Comment text

Options

  Line breaks become <br />

  Remember me

  Allow users to contact you through a message form.

Captcha

Please enter the characters from the image above. (case insensitive)

Captcha code