Borrowers Protection Laws Part V

Here are the last three laws that are designed to protect you:

The Real Estate Settlement Procedures Act of 1974
RESPA requires lenders to disclose the nature and costs of real estate settlements, and was also meant to protect borrowers against abusive practices, such as kickbacks, and limits the use of escrow accounts.

The Right to Financial Privacy Act of 1978
This law protects bank customers from the unlawful scrutiny of their financial records by federal agencies and specifies procedures that government authorities must follow when they seek information about a customer’s records from a financial institution.

The Truth in Lending Act
The Truth in Lending Act was originally enacted in 1968 to require uniform methods for computing the cost of credit and for disclosing credit terms. It gives borrowers the right to cancel, within three days, certain loans secured by their residences, prohibits the unsolicited issuance of credit cards, and limits cardholder liability for unauthorized use. It also imposes limitations on home equity loans with rates or fees above a specified threshold.

Truth in Savings Act
This 1991 law requires banks to disclose certain information to depositors about their accounts (including the annual percentage yield, which must be calculated in a uniform manner) and prohibits certain methods of calculating interest. Regulates advertising of savings accounts.

I hope you have found these laws useful. If you have any questions or comments, please do not hesitate to call.

Borrowers Protection Laws Part IV

Here are four more Borrower Protection Laws:

The Federal Trade Commission Improvement Act
This 1980 law authorizes the Federal Reserve to identify unfair or deceptive acts or practices by banks and to issue regulations to prohibit them. It is similar to the Fair Debt Collection Practices Act (which is enforced by the FTC). Since the law’s inception, the Federal Reserve has adopted similar rules that restrict certain consumer debt collection practices.

The Gramm-Leach-Bliley Act
This law governs the privacy of consumer financial information, and imposes limitations on financial institutions on the disclosure of consumers’ personal information to third parties, and also provides a method for consumers to opt out of information sharing. Financial institutions are also required to notify consumers about their privacy policies and practices.

The Home Equity Loan Consumer Protection Act of 1988
Congress enacted this law in 1988 to protect consumers against unconscionable terms included in home equity loans. It places restrictions on home equity loan offers, and requires lenders to provide consumers with detailed information about the loans they offer, including a brochure describing home equity loans in general. It also regulates the advertising methods employed by of home equity loans and restricts the terms of home equity loan plans.

The Homeowners Protection Act of 1998
This law established rules for automatic termination and borrower cancellation of private mortgage insurance (PMI) on home mortgages.

Borrowers Protection Laws Part III

As a continuation from the past two weeks, I would like to add more Borrower Protection Laws.

Here are three:

The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is a major piece of legislation first enacted by Congress in 1970, and has been amended on numerous occasions. The law is designed to protect consumers against inaccurate or misleading information reported to and maintained by credit reporting agencies. It requires credit reporting agencies to provide consumers with an opportunity to correct errors on their credit reports.

The Fair Debt Collection Practices Act
The FDCPA prohibits abusive debt-collection practices employed by third party debt collectors, such as collection agencies, and imposes significant penalties against violators.

The Fair Housing Act
This 1968 law prohibits discrimination in the extension of credit for housing, such as mortgages, on the basis of race, color, religion, national origin, sex, handicap, or family status.

Borrowers Protection Laws Part II

Borrower Protection Laws are put into place to protect you from any harm while you are trying to conduct any type of financial action. It is important to know these laws so you are not taken advantage of.

Here are 3 more laws:

The Expedited Funds Availability Act
This 1987 law specifies when banks must make funds deposited by consumers available to them, and requires banks to inform customers of their funds availability policies.

The Fair and Accurate Credit Transaction Act of 2003
This law was enacted as an amendment to the FCRA in order to assist consumers in combating identity theft and other matters that negatively affect their credit rating. It also allowed consumers to exercise greater control over the type and amount of marketing solicitations they receive, restricted the use and disclosure of sensitive medical information, and established uniform national standards in the regulation of consumer reporting.

The Fair Credit and Charge Card Disclosure Act of 1988
This law regulates credit card offers directed to consumers, and comes into effect whenever a consumer is presented with a credit card application (i.e., through the mail, the Internet, a bank, or a retailer). It requires credit applications to contain information about key terms of the account.

Borrowers Protection Laws

The federal government has enacted numerous statutes, rules, and regulations designed to protect consumers from unscrupulous lenders and other financial entities. These laws govern nearly every financial transaction a consumer might encounter.

Lending institutions, creditors, collection agencies, and other businesses that are regulated by these laws are all required to follow them, but that doesn’t mean that all of them do. As is often the case, what you don’t know can hurt you, and many companies take advantage of consumers’ ignorance of the laws that were enacted to protect them.

What follows is a very brief summary of some of these laws, what they do, and who has to follow them.

The Consumer Leasing Act of 1976
This law requires finance companies to disclose the cost and terms of automobile and other consumer leases.

The Electronic Fund Transfer Act (EFTA)
Enacted in 1978, the EFTA governs the manner in which consumers and financial institutions utilize electronic fund transfer services, such at ATMs, POS (point-of-sale) terminals, and preauthorized transfers directly from one bank account to another. This law comes into effect whenever you withdraw funds from an ATM machine, use your credit card, or pay bills online.

The Equal Credit Opportunity Act
Congress enacted this law in 1974 to prohibit discrimination in credit transactions on the basis of sex, age, race, religion, color, national origin, and other grounds. It requires creditors to grant credit to qualified individuals without requiring signature by spouses, and to inform unsuccessful applicants in writing why they were denied credit.

Over the next few weeks, I will be posting more laws and how they are designed to protect you.

Advantages of Home Mortgage Refinance Loans

There are many great reasons to consider a home mortgage refinance loan.

If you are considering mortgage refinancing but are not sure on how to get started then here are several tips which will help you to decide if it is a right kind of loan.

Every financial situation is different and not all would require a mortgage loan or refinancing. If the property value is increased in the recent time, then there probability of qualifying for a better interest rate with a new home mortgage refinance loan. Interest rate coupled with the repayment period will determine the monthly payment. Extending the period of repayment would offer a lower interest rate and helps in adjusting the monthly bills to be paid promptly.

Advantages of Home Mortgage Refinance Loans
There are lots of benefits left untapped by most of the borrower.

• Tax-deductible Debt consolidation can offer discounts on the amount of tax paid. But it is important to counsel with the appropriate department.
• Lower mortgage payments
• Lower mortgage interest rates will reduce the burden on the borrower to pay a high monthly payment.
• Borrowers can stop paying private mortgage insurance.
• Options to switch to more advantageous term length
• Ability to switch over to Fixed mortgage interest rate

It is important to collect as much information as possible to select the right kind of plan. This research works will prevent the borrowers from overpaying the monthly payments and saves money.

Options You Have to Avoid Foreclosure

If you are like many people, you may have found yourself in a situation that is leading down the road toward an impending foreclosure. There are several steps that you can take to halt this process:

1. REFINANCE - While this is a legitimate option, it is fairly unrealistic in the light of this economy where more and more homeowners are finding out that their homes are now not worth what they owe on the mortgage. But for some people, it might work!
   
2. REPAYMENT PLAN - This is where the borrower is allowed to catch up on any missed payments by perhaps doubling up on the payments until the account is brought current. Again, while this is an option, it is not very realistic because most people are facing foreclosure because they can't afford even one month's payments let alone doubling them!
   
3. FORBEARANCE PLAN- With this option, the borrower may be allowed to roll the missed payments onto the end of the loan term thereby extending the length of the loan. Sometimes this is what the bank does for its loan modification programs. Again, while an option, it is not very realistic because the borrower still has to make the same monthly payment which they couldn't make before. It is definitely more doable if the hardship was just a temporary glitch.
   
4. LOAN MODIFICATION- Borrowers are seeing more of these being done and it may definitely help out some of you who are facing a hardship! Many banks are now willing to change the original terms of a borrower's promissory note. Some are reducing the interest rate. Some may extend the length of the loan to 40 years. Some include a combination of the two! Most, however, will not reduce the amount of principal owed.
   
5. BANKRUPTCY- This is a court-approved reorganization plan where the borrower's loan may be changed from the original terms based on a loan modification. This is a major hit on a person's credit score and should be the absolute last option to be considered! Some people have even found that after filing for a bankruptcy, they also end up with the foreclosure on their credit score as well! A double whammy!
   
6. DEED-IN-LIEU OF FORECLOSURE- This allows the bank to take back the property without all the expenses incurred in a full foreclosure process. This has slightly less of an impact on one's credit score than a bankruptcy. The bank is unlikely to suggest it to a distressed borrower since they already have plenty of non-performing assets on their books right now!
   
7. SHORT SALE- This may be the best option for many distressed borrower's out there! There must be little or no equity in the property. Wow! Almost everyone facing foreclosure falls into that category. And the homeowner has to have a legitimate hardship. Well, with unemployment rates rising and home values going down who's not in hardship. Now, if you've gone out to buy a new speed boat or Lamborghini, forget it! You were not being financially responsible. But dare I say, not many people would fall into that category. As more and more people are falling into default, the banks are granting more and more short sales because they already have a whole boatload of REO's on their books. These are known as non-performing assets and affect the bank's ability to lend out money for loans and make money from the interest rates they charge. This means that banks are really trying to get rid of the properties they already own and don't want yours!