Know about the New Mortgage Rules to Protect Homeowners from foreclosure

Due to the financial and mortgage crisis, many families lost their homes to foreclosure. As a homeowner, it is important that you know about the new mortgage rules so that you can avoid foreclosure. The new rules amend the regulations that were implemented from 1974 through 2010. By January 2014, these rules will take effect.

The New Rules

The following are the new mortgage rules that you should know:

  1. Billing statements must be provided periodically. The statements should include transaction or payment histories, any delinquencies, the imposed fees, etc. As the situation may require.
  2. People with adjustable rate mortgage must be notified at least 210-240 days before the first payment using the new rate.
  3. Payoff statements and payment crediting must be provided promptly upon the request of the borrower.
  4. Servicers can’t charge force-placed insurance automatically.
  5. Servicers have five days to respond when a borrower requests for information especially regarding errors.
  6. All the policies and procedures created by servicers must be reasonable.
  7. Attempt a ‘live contact’ with the delinquent borrower within 36 days to avoid foreclosure. Personnel must be assigned to make sure that the borrower will no longer fail to pay the mortgage on time.
  8. There should be options for loan modification. Most borrowers would rather modify their loans than wait for foreclosure.

According to some experts, these new mortgage rules won’t make any difference because consumers will not see if such rules are enforced. This is hardly true since prudential regulators and the Bureau can supervise the servicers within their jurisdictions. It is also the responsibility of the borrower to know the new rules to protect them from foreclosure. With knowledge, a homeowner can determine if the servicer is not following the new rules and can demand action.

A New Light Shines for Borrowers

Dealing with mortgage servicers is a dreadful experience for most borrowers. Consumers are protected from the detrimental actions of these mortgage servicers, and they can demand for better information. Borrowers can now have direct access to employees or staff that will help them with their issues. All foreclosure alternatives must be considered once the borrower misses out for two successive payments. You will be entitled to receive a notice, and with it is information on the alternatives like loan modification and deferred payments. Servicers are usually after the options that are financially favorable to them. This time, the new rules imply that the option favorable to the borrower must be given priority.

Borrowers must not allow servicers to influence the system. Knowledge about these new rules is the only way to prevent foreclosure. You can sleep soundly at night even if you are on financial crisis because there will be no foreclosures sales until all alternatives are covered. Foreclosure proceedings are restricted while mortgage modification is still being considered. You will have enough time to save your home from foreclosure, so don’t waste your time. Though the new rules will take effect on 2014, many homeowners are now looking forward to the implementation of these rules and regulations.

Author Bio:

John Lewis is Marketing lead at Microbank.com.au, Microbank is Friendly and Professional lending company, provide bridging loans and bridging finance as fast as 24 hours. We offer different types of bridging loans and help people those are buying a new property or need investment for business.