Easier Solutions For Home Owners

Easier Solutions For Home Owners

Imagine suing Wall Street because your mortgage company had financed you for a loan that you couldn't repay! It sounds unreal, but a new bill proposed would allow just that! The mere fact that there is even such a bill being thought of could serve as a warning to all of us that care must be taken, as not all financial institutions are not equal!

While this proposed bill may get opposition from Wall Street and mortgage companies, if passed it will make it easier for struggling home owners to pursue other financial options for their home.

It will be easier for anyone who wants to pay down their mortgage, or who wants to try and re-finance their home, if the new proposals by the Senate Banking Committee are accepted.

The chairman of the Senate Banking Committee, Christopher J. DOD is introducing this bill in the hope that it will restrict certain lending practices. It was prompted by the surge in default rates on mortgages made to people with poor credit rating.

One of the advantages to this bill for homeowners is that it will legislate for mortgage brokers to act in the interest of the borrowers. This will discourage the practice of mortgage lenders to pay mortgage brokers a larger commission if the property owner takes out a loan at a higher cost than necessary. The proposals are not expected to take much effect until early next year, giving plenty of time for the opposing factions to organize themselves.

Mr. Dode's bill would also ban such practices as subjecting borrowers to prepayment penalties. Having to make these penalty payments hinders borrowers from trying to refinance or pay off their loans early. Sometimes the penalty written into the loan contract can be as high as three months extra mortgage fees or a lump sum such as $3000.00. Naturally this discourages change to someone who is already struggling financially.

One advantage of this bill is that it has given extra understanding to the ordinary house buyer. Whether it gets through or not, it has brought awareness for the type of questions that need to be asked when looking for financing.

It will be a struggle to get this type of bill through, but it is gratifying to know that in this case, the Senate Banking Committee are backing the man on the street!