New Federal Mortgage Rules Help Protect Buyers

Much of today’s financial woes, including home foreclosures and personal bankruptcies, came about due to unregulated and unfair mortgage practices, as well as enough greed to go around several times.However, the Federal Reserve has enacted new rules to help protect consumers against abusive mortgage practices, including clearer cost disclosures and a ban on payments to mortgage brokers for steering borrowers into mortgages with higher interest rates. The final ruling, which takes effect on April 1, 2011, will end the so-called yield-spread premium payments blamed for pushing millions of borrowers into unaffordable home loans. It also prohibits loan originators from leading consumers into mortgages that increase payments or bonuses to a broker or loan officer.In an article in the Chicago Tribune, a spokesman for the Fed stated, “’This will prevent loan originators from increasing their own compensation by raising the consumers’ loan costs, such as by increasing the interest rate or points.’”Another Fed ruling requires lenders to provide consumers with clearer disclosures regarding their loan costs, including a table that shows the maximum interest rate and payment that can occur during the first five years of an adjustable-rate mortgage as well as showing the highest possible maximum rate and payment over the life of the loan.Lenders also need to alert consumers that they may not be able to refinance their loan to avoid higher interest rates.If you find yourself facing foreclosure on your home, filing Chapter 7 or Chapter 13 personal bankruptcy could help you make a fresh start. For experienced, knowledgeable and trustworthy bankruptcy assistance, contact the attorneys from www.legalhelpers.com. Call toll-free 800-260-1402 today for your initial free consultation or come into one of their 100 offices across the country. 

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