Congress Takes on Lending Industry
Daily Real Estate News April 17, 2007
Congress is targeting the rising tide of home foreclosures and the sagging subprime loan business, and its efforts are likely to result in changes in the way the home finance industry does business.
Here are some key proposals on the table:
Impose a six-month national moratorium on foreclosures.
Increase federal support for local foreclosure prevention programs.
Strengthen the Federal Housing Authority and give it a "rescue fund" that would allow it to buy failed mortgages and restore credit on the loans.
Increase penalties on banks that violate federal lending laws.
Extend federal regulations to mortgage brokers and other loan officers who are now only regulated by state laws.
Create a federal anti-predatory lending law.
Establish a federal standard for a borrower's ability to pay.
Source: Gannett News Service, Ana Radelat (04/13/07)
It will be interesting to see if anything actually IS done with the rising number of foreclosures. From my experience lenders have been very closed minded to working with borrowers who are in jeopardy of defaulting on their mortgages.
I've had more than one seller who have been unable to make their payment, due to the loss of a job or some other significant issue. These people were told by their mortgage companies that there wasn't anything that could be done for them, even though they could no longer make their payments. . . . . .because they had a good credit history with no late payments.
In these instances, instead of having the mortgage companies work with these sellers, they actually told them they NEEDED to stop making payments, go into default, and let the foreclosure process start.
No wonder the foreclosure rate is so high right now. Even people who WANT to find a way out, can't.
Congress is targeting the rising tide of home foreclosures and the sagging subprime loan business, and its efforts are likely to result in changes in the way the home finance industry does business.
Here are some key proposals on the table:
Impose a six-month national moratorium on foreclosures.
Increase federal support for local foreclosure prevention programs.
Strengthen the Federal Housing Authority and give it a "rescue fund" that would allow it to buy failed mortgages and restore credit on the loans.
Increase penalties on banks that violate federal lending laws.
Extend federal regulations to mortgage brokers and other loan officers who are now only regulated by state laws.
Create a federal anti-predatory lending law.
Establish a federal standard for a borrower's ability to pay.
Source: Gannett News Service, Ana Radelat (04/13/07)
It will be interesting to see if anything actually IS done with the rising number of foreclosures. From my experience lenders have been very closed minded to working with borrowers who are in jeopardy of defaulting on their mortgages.
I've had more than one seller who have been unable to make their payment, due to the loss of a job or some other significant issue. These people were told by their mortgage companies that there wasn't anything that could be done for them, even though they could no longer make their payments. . . . . .because they had a good credit history with no late payments.
In these instances, instead of having the mortgage companies work with these sellers, they actually told them they NEEDED to stop making payments, go into default, and let the foreclosure process start.
No wonder the foreclosure rate is so high right now. Even people who WANT to find a way out, can't.
Labels: Foreclosures
posted by Brittany Nigh at 7:13 AM
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