Regardless of whether you blame Wall Street traders, financially illiterate homebuyers, or greedy mortgage lenders for the housing boom — and subsequent bust — the number of homeowners who can’t afford their homes is staggering.
According to RealtyTrac Vice President Darren Blomquist, at least 10.9 million homeowners are “seriously underwater” on their mortgages in January 2013.
In mid-January, the Consumer Financial Protection Bureau announced new mortgage rules intended to protect mortgage borrowers from predatory lenders (and themselves). Though the regulations won’t take hold until Jan. 10, 2014, they will change the experience of having a mortgage — and potentially, if you’ll be approved for one.
Here are some of the major changes you’ll see to the mortgage lending process and mortgage rules in 2014.
If you’ve already got a mortgage, your lender must:
Be clear about where your money goes
Credit card holders have seen greater transparency, like how long it will take to pay down a balance, in their monthly statements for a couple of years, and as of January 2014, mortgage statements will follow suit, according to the new mortgage rules.
Among the changes, mortgage lenders must provide a monthly billing statement that clearly indicates which aspect of the monthly payment went to escrow and principal (if any), the balance owed, and any service or transactional fees paid. (For those with a fixed rate mortgage and monthly payment book, it can serve as the statement, with some additional detail reflected).
When you make monthly or additional payments, the lender must credit the amount to your account the day funds are received, and respond to your inquiries about paying the loan off within seven days of receiving correspondence, the mortgage rules say.
If you write your mortgage lender with a question or concern about your account, they must acknowledge your correspondence within five days. From that time, they have 45 days to address the issue and inform you of the outcome.
Tell you of interest rate changes
Under the new mortgage rules, credit card issuers must notify you by mail if your interest rate is increasing, at which point you have the option to accept or reject the new card agreement terms.