SHADY LENDING PRACTICES BEING CURBED BY FEDS …..
Shady lending is what sent many folks into foreclosure & these changes will occur:
1. no loan unless can document borrower’s income,
2. lenders to escrow money to pay taxes & insurance for risky borrowers,
3. limit & in some cases, ban - prepayment penalities,
4. prohibit lenders from making a loan - must consider borrower’s ability to pay from
sources, other than home’s value,
5. mortgage advertising to contain info on rates, monthly payments, etc.
6. lenders credit a mortgage payment to homeowner’s acct. on day it is received,
7. forbid brokers, etc. from “coercing or encouraging” an appraiser to misrepresent the value
of the house.
To become effective 10/1/08, but escrow requirements 3/1/10.