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Buying a home in Delaware – Consider Ability to Repay Mortgage!

was not on the forefront of the minds of consumers purchasing homes

There was a feeding frenzy to buy homes regardless of the ability to repay the loan

The prevalent thought at the time seemed to be , buy now and worry later

Unfortunately, this school of thought has hence caused thousands to lose their homes in foreclosures and scores other also filing for bankruptcy

 

Since 2008, the mortgage world of finance  has seen a complete change in the way it does business

Lenders as well as consumers must now consider many new guidelines before receiving  a mortgage

 One of the  biggest considerations is can the consumer qualify and still have the ability to repay their mortgage? 

Changes in mortgage underwriting to qualify for a mortgage has been a rude awakening for many consumers, as denials have increased

 Many home buyers have found that the world of lending has changed

Lenders are asking for concrete documentation for income, assets, explanations regarding credit, and other obligations such as student loans and prior collection accounts

These new underwriting guidelines and regulations regarding lending are taking place to make sure consumers are being protected

In other words, it doesn’t do you much good to get into a debt repayment, unless you have the ability to repay that debt, only later to endure the heartbreak of losing what you thought was a sure thing

 Making sure you have the abiliity to repay are a return to common sense and reasonable financial responsibility on both lenders and consumers

 

The

consumerfinance

gov/f/201301_cfpb_final-rule_ability-to-repay-preamble

pdf” title=” final rule” target=”_self”> final rule implements sections 1411 and 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling (excluding an open-end credit plan, timeshare plan, reverse mortgage, or temporary loan) and establishes certain protections from liability under this requirement for

consumerfinance

gov/” title=”Bureau” target=”_self”>Bureau believes that these criteria will protect consumers by ensuring that creditors use a set of underwriting requirements that generally safeguard affordability

(source: http://www

consumerfinance

gov/)

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