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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