What happens if a borrower decides his loan is unaffordable?

By
Real Estate Sales Representative with Weichert Realtors NJ 8736639

What happens if a borrower decides his loan is unaffordable?

 

The Wall Street Journal reported that regulators have established new mortgage rules and that these rules have been set to prevent the problems that exist in the lending practices of the past decade. These new rules also give the borrower greater legal rights against financial institutions that grant mortgages that are not affordable to the buyer.

Lending institutions will be required to document buyers ability to pay the loan and this intern will mitigate possible lender liability if borrower defaults.

Will interest only loans disappear?

Many non qualifying loans have or will disappear. These are loans were very adaptable to the affluent sector. These new guidelines may stir and change things even further.

 

What happens if a borrower decides his loan is unaffordable?

As quoted from the article:

"Borrowers can sue the lender or the investor for damages. Banks that prove they met the qualified mortgage definition will have a greater shield from liability for loans that carry a prime rate, and a smaller shield on high-cost loans, which are typically made to subprime borrowers"

Qualifying mortgages are the future....follow the link to learn more

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New Jersey Passaic County Wayne
Tags:
new mortgage rules
lender liability
qualifying mortgage

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Rainer
330,744
Edward Gilmartin
CRE - Boston, MA

Every borrower has the right to let a lawyer look over the loan documents before signing...this would save a lot of trouble and needless regulation.

Mar 04, 2013 09:19 PM #1
Rainmaker
89,793
Dolores "Dee" Mauriello
Weichert Realtors - Wayne, NJ
Realtor, Homes For Sale Wayne NJ

Edward its not common practice but your right an attorney should look over the paperwork.  On the other hand an account would be more suiited to confirm buyer is not going above what they can afford.

 

Mar 04, 2013 09:23 PM #2
Rainmaker
89,793
Dolores "Dee" Mauriello
Weichert Realtors - Wayne, NJ
Realtor, Homes For Sale Wayne NJ

An Accountant should look over paperwork and buyer's financial situation.

 

Mar 04, 2013 09:24 PM #3
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Rainmaker
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Dolores "Dee" Mauriello

Realtor, Homes For Sale Wayne NJ
Call today for information on Wayne area "Smart Seller Program"
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