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Mortgage regulations stiffen in January, bankers concerned

With the New Year comes new regulations regarding mortgages. Some of these regulations might affect a consumer’s ability to get a mortgage for a home. Starting on Jan. 10, 2014, banks must abide by the Dodd-Frank Act, which outlines new rules for mortgages. Florida residents might like to know how this act will change mortgage issuance by banks.

The new rules, which were defined by the Consumer Financial Protection Bureau, are meant to help ensure that people who take out mortgages are able to pay for them. Some banks are worried that these rules, which include eight underwriting factors to consider, will make it harder to lend money for home purchases. The rules limit the fees and upfront points on a mortgage to 3 percent of the loan total. The debt-to-income ratio requirement for mortgages is now a maximum of 43 percent under the new act.

Under the Dodd-Frank Act, interest-only home loans, negative amortization home loans and home loans with a duration of longer than 30 years are all prohibited. These stipulations, along with others in the act, might limit the options consumers have available to fund home purchases.

For homeowners who are having trouble keeping up with mortgage payments, finding suitable options for keeping the home might be difficult. If you are seeking a mortgage modification or any other avenue to stop the foreclosure on your home, you might have legal options available to help. Working with a Florida attorney with experience in bankruptcy and mortgage modifications can help you to explore those options.

Source: South Florida Business Journal, “Banks concerned new rules may make issuing mortgages more difficult” Scott Harrison, Jan. 02, 2014

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