New Mortgage Modification Federal Laws

The new loan modification federal laws can uncover fraudulent lenders

New loan modification federal laws, which have been approved during last year, have helped homeowners to avoid foreclosure and to make their monthly mortgage loan payments affordable. The government has aided both lenders and borrowers with this set of new rules.

The primary laws that set the rule of thumb for mortgage loans are the following:

1. The Fair Credit Reporting Act (FCRA) encourages trueness, promotes correctness and concealment of information of the borrowers’ documents. When you file for a loan modification, the bank issues a financial report; with the help of FCRA you have complete access to the information they issue.

For example, if you have applied for a credit card and have been denied, you will have been given a file in which their decision is justified, explaining the necessary measures you need to take in order to meet their demands. You have the Fair Credit Reporting Act (one of the new loan modification federal laws) to thank for this.

2. ECOA (Equal Credit Opportunity Act) interdicts any favoritism in loan approval, taxing racism and religious, national, sex or age discrimination.

Discriminating an individual does not only imply the fact that the mortgage loan modifications will not be approved, but also the fact that some banks might profit from minorities by offering them unprofitable mortgage conditions.

3. The Truth in Lending Act (TILA) obligates the lender to offer the borrower information regarding the APR, the annual percentage rate, the length of the new loan and the total sum, including the primary loan and the interest rates, before the loan is approved.

All this information must be provided to the customer before he signs the contract. Furthermore, the bank is supposed to issue monthly statements.

4. RESPA – the Real Estate Settlement Procedures Act — requires banks to present a clear estimation of all included payments that the homeowner is supposed to make. This helps the owner avoid having to pay hidden taxes at the end of the loan.

Although these rules were given quite a while ago, the newly added amendments help guide homeowners to receive mortgage loans without being mislead and having to pay hidden fees.

If you are in the middle of a foreclosure process, there is a high chance your bank has disregarded some of these new loan modification federal laws and you can take advantage of the situation. Loan modification lawyers know all too well what these federal regulations involve and can help you deal with your mortgage firm.You may have been sold a subprime mortgage and if this is the case, the federal government can protect you in case of litigation. They are currently investigating such problems, caused by renowned companies all over the country. Real estate companies may be at fault for you financial crisis as well. They may have lied about your income to the bank. In addition to that, a fluctuating monthly interest is a clear sign of breaking the law. A mortgage modification lawyer can read the signs fairly easy and can aid your case by working the system and the government laws in your favor.