Fighting Foreclosure

There are new signs tonight the nation's housing market remains on unstable ground.{} The number of Americans more than 60 days late behind on their mortgage payments is much higher than it was a year ago.{} And the number of people losing their homes to foreclosure is also on the rise. Information is key to prevent further foreclosures and another mortgage meltdown.{} To do that, the Federal Reserve has just issued a batch of new proposals:{}

  • Lenders would be required to fully disclose to borrowers how their payments could potentially fluctuate over time, especially in the case of adjustable rate mortgages.
  • Lenders would also need to provide details on a "worst case scenario", the maximum interest rate and payment a borrower would have to make.{} Balloon payments, due at the end of a loan's term, would have to be fully disclosed as well.
  • The Fed also wants to make sure that those who enter into reverse mortgages, a financial tool increasingly used by older Americans to tap into their home's equity, know what they're getting into.

The more information a homeowner is armed with, the less chance of falling behind on their mortgage payment , and losing their home to foreclosure.