Foreclosure Relief is Granted in Illinois
By Foreclosure Fighter Staff Writer
As foreclosure rates continue to rise around the United States, more and more families are forced to face the consequences of mortgage decisions they made in a time of heartier real estate markets. Adjustable rate mortgages are resetting, monthly payments are rising, and people are finding themselves unable to pay the bills.
The pervasiveness of foreclosures has finally forced institutions to make changes and take action to help struggling American families.
Washington Mutual Inc. (WaMu), a savings and loan corporation, has recently increased its demands on brokers in an effort to ensure higher levels of borrower awareness, according to Bloomberg reports. Specifically, WaMu is reportedly requiring proof from their brokers that borrowers were shown and explained the terms of their loans.
This includes any prepayment penalties, rate changes that could occur, and specific amounts involved. In addition, according to sources, WaMu will have staffers review loans directly with borrowers before allowing finalization.
In the world of lending, brokers are the middlemen between Washington Mutual (the lender) and the borrower. The lenders have ultimate responsibility for underwriting, reviewing, and approving all loans. Because of this, it's in their best interest to make sure terms are appropriate to a borrower's financial situation.
Sources indicate that the United States is in its worst housing slump in 16 years, with more than two million homes expected to go into foreclosure over the next two years. Experts have blamed various factors for the current state of affairs, including poor enforcement of existing borrowing/lending laws and deceptive and predatory lending practices.
With the introduction of their new standards, WaMu apparently hopes to correct these problems. The company is choosing to focus on borrower awareness, so that consumers are in a position to make well-educated decisions about their home loans.
Consumer advocates reportedly approve of Washington Mutual's efforts, agreeing that lenders who use brokers are obligated to take responsibility for the terms of the loans offered.
And WaMu isn't the only organization heeding the call to action. Democratic Representative Barney Frank is working on legislation that would require mortgage brokers to adhere to nationwide license and registration requirements, making standards easier to uphold and oversee.
Alabama Representative Spencer Bachus and Connecticut Senator Chris Dodd are both in the midst of developing foreclosure-fighting laws of their own.
The persistence of the American foreclosure crisis has forced the country to take notice. Thanks to Washington Mutual, Representatives Bachus and Frank, Senator Dodd, and other like-minded individuals and organizations, there is hope for the families affected.