Here’s what the Biden administration’s new mortgage management rules mean to you

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The CFPB and FHFA have established new mortgage management rules to help homeowners who are having trouble making their mortgage payments. (iStock)

The Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Administration (FHFA) each released new mortgage management rules at the end of June that put regulations in place to help homeowners who are still struggling to repay their mortgages. due to COVID. -19.

The CFPB rule was published as an amendment to the Loan Truth Act and the Real Estate Settlement Procedures Act, a rule that protects homeowners and borrowers from abusive lending practices. This rule will come into effect on August 31, 2021.

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Just a day after this amendment was released, the FHFA announced it would ban federally backed mortgage companies Fannie Mae and Freddie Mac from making most foreclosure filings until the CFPB rule comes into effect. force.

If you’re struggling to make your mortgage payments, refinancing could also be a good option, helping you get a lower interest rate and lower your monthly payments. Visit Credible to see your personalized rate from multiple mortgage lenders at once.

AS THE FHFA EXTENDS THE MORATORIUM ON THE FORECTURE FOR THE LAST TIME, HERE’S WHAT THE STRUGGLE OWNERS CAN DO

What is the new CFPB rule for?

Early intervention and loss mitigation requirements for mortgage agents are changed due to the new CFPB rule. Simply put, the rule sets out guarantees to help borrowers who are at risk of losing their homes to the coronavirus pandemic, and helps them move to a loss mitigation deal or repayment plan that’s right for them.

Under the new rule, mortgage agents cannot come up with a loan modification plan that would increase a homeowner’s monthly payment coming out of their forbearance program and cannot extend the loan term by more than 480 months. . The rule will also allow mortgage agents to bank on missed payments until the mortgage is over to prevent homeowners from falling into delinquency.

If you’ve missed mortgage payments due to COVID-19 hardship, you may still be eligible for mortgage refinance. Visit Credible to see multiple lenders and get prequalified without affecting your credit score.

“The way service providers have been able to manage loss mitigation in the past, including resource allocation and communication methods used, may not be as effective in these unprecedented circumstances.” the CFPB said.

If you’re struggling to make your mortgage payments after your forbearance period ends, you may not have to face fees, penalties, or even bankruptcy. Visit Credible to see the refinancing options available to you. As home prices rise, more homeowners can benefit from mortgage refinancing and lower monthly payments.

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FHFA restrictions – here’s what they mean

Since the final CFPB regulation will not come into effect until the end of August, the FHFA has issued its own rule in the meantime. They prevent some lenders from initiating the foreclosure process or having a foreclosure sale before the new rule takes effect.

The FHFA announced that agents cannot initiate a first notice of foreclosure on mortgages guaranteed by Fannie Mae and Freddie Mac. This rule does not apply to abandoned properties or those that were the subject of a foreclosure file before March 2020. After the moratorium on foreclosures ends on July 31, 2021, GSEs will essentially have to follow the new rule. CFPB one month before its entry into force due to the FHFA rule.

“The COVID-19 pandemic has created many financial challenges for families”, FHFA Acting Director Sandra Thompson said. “Through no fault of their own, many of these families have had to rely on COVID-19 abstention to stay safe in their homes during the pandemic. Today, the finances of many families are improving, which allows them to come out of abstention. place today will protect vulnerable families as they begin their financial recovery from the impact of the COVID-19 pandemic. “

HERE’S WHY YOU SHOULD (OR SHOULD NOT) REFINANCE YOUR MORTGAGE

While the Biden administration is actively creating policies that it says will help homeowners, these solutions are not permanent. Borrowers will still need to take steps to begin making their mortgage payments after their forbearance options expire. You can work to get your home loan back on track by amending your loan, paying off missed payments, or even refinancing. Contact Credible to see your options and speak to a mortgage expert who can answer all of your questions.

Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at moneyexpert@credible.com and your question could be answered by Credible in our Money Expert column.


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