The government is looking for new ways to help homeowners avoid foreclosure. While many steps have been taken to make mortgage modification and refinancing offers more available, there is still much to be done in the avenue of consumer education. Now, the government has proposed several new changes to mortgage lending rules that are designed to help homeowners better understand their mortgage terms and plan for the unforeseen.
Truth In Lending
The mortgage industry has taken a hit to its reputation in recent years. After much investigation into the robo-signing and unlawful foreclosure scams going on with some of the top lenders, many consumers don’t view mortgage lenders in the same light. Although the scarred reputation may be somewhat just, the government knows that even the most honest lenders could use some procedural changes to help make foreclosure less imminent in the future.
The new lending rules proposed by the government this week will give homeowners a better understanding of their monthly mortgage payments and allow for more opportunities to avoid foreclosure. If approved, mortgage lenders will be required to give borrowers standardized monthly statements that warn about changes in interest rate or insurance fees. Lenders would also be required to contact at-risk borrowers and assist them in reviewing their foreclosure alternatives prior to initiating a foreclosure on the home.