Tampa Bay Online reported today that the Federal Reserve has taken measures to toughen up on shady home lenders. For people looking to buy a home in Dade City, Plant City, Brandon - or anywhere else in the country for that matter - this may mean fewer choices when tailoring a loan to suit a homebuyer's circumstances.
The measures are being introduced in response to the mortgage meltdown that has led to large numbers of people losing their homes and include provisions such as:
• Preventing mortgage companies from imposing penalties for risky borrowers who pay off their loans ahead of time.
• Requiring lenders to consider the homeowner's ability to pay back their home loan from income aside from the value of the home.
Some that may cause inconvenience and lessen mortgage choices available to homeowners are the requirement to make sure risky borrowers set aside money for property tax and insurance and requiring proof of a borrower's income, which can make it more difficult for self employed small business owners to obtain a home loan.
The Fed also proposed some recommendations to prohibit misleading advertising and require a greater amount of disclosure early on in the process when they are shopping for a mortgage to buy a home, in addition to other recommendations. Read more in the Tampa Bay Online article: Fed Targets Shady Home Loans
If you are a homeowner facing foreclosure on your Tampa home, you may benefit from negotiating a short sale.
On the flip side if you're looking to buy, the record number of foreclosures has made this a good time for purchasing real estate in Tampa. The Florida market, always considered a desirable place to live, will certainly rebound.
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We'll see if the protection recommendations pass. Some of them are already initiated within the industry. The sad truth is these moves are only good for what happened in the past and bad for the future. We will, however, survive. People still need to move, to upgrade or replace. Homes will sell!