Real Estate Pro Articles
Real Estate Pro Articles Author Photo    

Fed steps forward to shield consumers

[Valid RSS feed]  Category Rss Feed -
By : Rudson Tren    99 or more times read
Abusive mortgages were creating problems for the consumers. The Fed noticed this and came up with new regulations for the lenders, so the consumers stay protected from the abusive mortgage lending practiced by the lenders. The new rules became effective from April 1, 2010. The new regulations laid down by the Federal Reserve Board are mentioned below:

  • Lenders will be banned from paying more to the originators of mortgages who steered the consumers towards loans which are more expensive.

  • The lenders used to pay incentives known as “yield spread premium”, which steered the consumers towards loans which were of high interest rates and the Fed rules now, put a restriction on that.

  • The lenders will now be required to disclose all the information to the consumers on how the payments can change over time. A failure to do so will lead to actions taken.

  • The lenders also need to inform the consumers about the maximum amount that the consumers can owe under any adjustable rate loan.

  • The lenders are also required to inform the consumers or the homebuyers about any balloon payments accruing at the end of the repayment term.

If the lenders fail to do so and if the consumers register a complaint against the lender to the Fed, it can lead to serious consequences.

These new tightening regulations were laid down by the Fed after the economy faced serious threats, due to the housing market disaster. Several million consumers lost their homes to foreclosures and thousands and even millions are waiting for the same fate. So, the demand for new homes has fallen to record low levels, because the homebuilders are facing tremendous challenges from the lenders, who are selling off their repossessed properties at discounted prices.

This is good news for the consumers who are planning to buy preoccupied homes. It may be a little difficult to locate the latest listings and foreclosures deals.
For more information of foreclosure listings, visit, your source of fixer upper homes for sale.

Warning: include(): http:// wrapper is disabled in the server configuration by allow_url_include=0 in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Warning: include( failed to open stream: no suitable wrapper could be found in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Warning: include(): Failed opening '' for inclusion (include_path='.:/usr/local/php56/pear') in /home/onlineb1/public_html/realestateproarticles/articledetail.php on line 105

Related Articles

Print This Article
Add To Favorites




© All rights reserved to Real Estate Pro Articles