Changes In Mortgage Lending

Now that some of the dust has settled after the mortgage settlement, lenders are required to make some important changes to the way they do business. Having been developed in light of the recent unlawful foreclosure episode, lenders will be held more accountable for their actions and be under much more scrutiny than ever before.

Holding Feet To The Fire

One of the biggest issues facing homeowners today is foreclosure. Unlawful or lawful, foreclosure is a huge problem in the real estate market today. Not only are foreclosure leaving many without a home, but lenders have also lost millions and some have even engaged in poor business in efforts to minimize loss. However, in order for the market to improve many changes must take place, many of which are in mortgage lending.

Lenders will be required to provide distressed homeowners with more clear notification that their home is at risk of foreclosure. Full disclosure of intent to foreclosure and the process in which homeowners can prevent foreclosure are now to be commonplace among lenders. Lenders will be encouraged to offer homeowners mortgage counseling and review options like loan modification and refinancing, for those that qualify.

Further, lenders will be under the burden of proof when lawful foreclosures do take place. In other words, evidence of robo-signing will be under close watch and the  lender will have to prove they followed protocol when foreclosing on a home. All steps must be followed and documented before a home can be taken in foreclosure. These new rules come in hopes that lenders will be able to figure out better ways to avert losses without impacting homeowners opportunities to recover from mortgage debt troubles.