New Rules for Mortgage Spell Protection

by | Jul 7, 2015 | Real Estate

Top Of The List



Ever since the passing of the new mortgage rules, rumors have been rife that the new rules are meant to block the way for homeowners to successfully secure themselves bank loans. Despite the mill being abuzz with criticism, a careful reading of the new rules provides a different picture. The new rules are simply meant to make sure that in the future homeowners with home loans aren’t made to gasp “Save my home” in Woodland Hills or any other place in the US.

The new rules are meant to give greater protection to the homeloan seekers to make sure that the government can stop the repeat of the last few years’ recession home loan debacle. One of the leading characteristics at the core of the new regulations is for the banks to make sure of the debtor’s ability to repay before granting him/her a loan.

Here is a list of the restrictions that the new mortgage rules aim to place the home loan practice under to make sure there are no people asking to “Save my home” in Woodland Hills or other parts of US moments anymore.

Rules to Protect

1. Restrictions On Foreclosure Proceedings

One of the leading restrictions that have been imposed on foreclosure have been on the proceedings in cases where borrowers are trying to get themselves a mortgage modification, also referred to as dual trafficking. This modification will allow you to be protected from the mortgage servicers’ foreclosure proceedings while you continue to seek either some other foreclosure alternative or a loan modification.

2. Allow For Consideration Of All Alternatives Of Foreclosure

This procedure is going to be used for anyone who has missed more consecutive payments that can be more than one or two. In these cases, according to the procedural changes laid down, the servicer will need to issue a written notice. The written notice must be accompanied by some samples of foreclosure alternatives available to the borrower. These options are not required to be extensive and may only contain a few alternatives such as loan modifications to deferred payments.

3. Staying Away From Force-Placed Insurance

This has long been one of protections that debtors have wanted. The new regulations make sure that this is put in place. The new regulation allows the mortgage servicers who will be purchasing home insurance to act differently to what they have previously been doing. For those who do it on behalf of the client, they need to give their clients ample warning and price information. Only once that has been done are they allowed to terminate it within 15 days. This is going to also apply to situations of refund of any premiums – which more often than not are determined later and are not necessary.