As a real estate investor, you may occasionally encounter a homeowner who has been the victim of a less-than-ethical mortgage lender. This can even result in a situation where you go to buy a distressed property, only to find that it becomes embroiled in a legal battle. It can be a challenging and time-consuming process for both the homeowner and the investor who’s seeking to acquire the home. But there are new rules that are designed to help prevent wrongful foreclosures. That’s exactly what we’ll explore in today’s article from The Short Sale Gal, Kristine Zelazo.
CFPB Implements New Foreclosure Protections for Homeowners
The Consumer Financial Protection Bureau (CFPB) was established following the U.S. housing market crash that started in 2006. The agency was developed to create new regulations, which included measures to require mortgage companies to grant certain foreclosure protections to a struggling borrower on one occasion over the life of the loan.
Per the latest measure, mortgage lenders are required to provide these protections more than once, offering them to borrowers who make current payments after they have worked out an agreement to avoid foreclosure.
According to a statement from the CFPB, “This change will be particularly helpful for borrowers who obtain a permanent loan modification and later suffer an unrelated hardship – such as the loss of a job or the death of a family member – that could otherwise cause them to face foreclosure…The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon.”
The new changes also apply protections to the surviving family members who may be straddled with a mortgage following a loved one’s death. Mortgage companies must also provide the borrower with information about possible interventions and options if they’re going through a bankruptcy.
The CFPB’s new rules also bolster requirements related to loss mitigation. Loss mitigation is a foreclosure alternative that allows people to stay in their homes and pay some money to their lender. Under the new regulations, mortgage lenders are required to promptly notify borrowers when loss mitigation applications are complete and will not be able to “dual track,” where they take legal steps toward foreclosure while simultaneously evaluating applications.
Notably, according to a report released in June 2016, a survey of mortgage companies revealed that a portion are providing consumers with out-of-date information or none at all.
The CFPB has also reported that it is seeking to create new debt relief programs which could impact the distressed property real estate market sector.
Ready to Get Started in Real Estate Investing?
If you’re getting started in real estate, consider working with a real estate investing mentor like The Short Sale Gal, Kristine Zelazo. Getting started in real estate investing can be somewhat challenging, but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!
To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 786.570.0360.