Fed steps forward to shield consumers.

Abusive mortgages were creating problems for the consumers. The Fed noticed this and came up with new regulations for the lenders, so the consumers stay protected from the abusive mortgage lending practiced by the lenders. The new rules became effective from April 1, 2010. The new regulations laid down by the Federal Reserve Board are mentioned below:

• Lenders will be banned from paying more to the originators of mortgages who steered the consumers towards loans which are more expensive.



• The lenders used to pay incentives known as “yield spread premium”, which steered the consumers towards loans which were of high interest rates and the Fed rules now, but a restriction on that.



• The lenders will now be required to disclose all the information to the consumers on how the payments can change over time. A failure to do so will lead to actions taken.



• The lenders also need to inform the consumers about the maximum amount that the consumers can owe under any adjustable rate loan.



• The lenders are also required to inform the consumers or the homebuyers about any balloon payments accruing at the end of the repayment term.

If the lenders fail to do so and if the consumers register a complaint against the lender to the Fed, it can lead to serious consequences.

 These new tightening regulations were laid down by the Fed after the economy faced serious threats, due to the housing market disaster. Several million consumers lost their homes to foreclosures and thousands and even millions are waiting for the same fate. So, the demand for new homes has fallen to record low levels, because the homebuilders are facing tremendous challenges from the lenders, who are selling off their repossessed properties at discounted prices.

 This is good news for the consumers who are planning to buy preoccupied homes. It may be a little difficult to locate the latest listings and foreclosures deals. To serve them, ForeclosureDataBank.com has done a great job in listing all the latest foreclosed houses from all around the country. Visit us if you are willing to buy a foreclosed property!