On Tuesday, the Department of Housing and Urban Development (HUD) announced that they will soon be releasing a new set of guidelines for the sale of all mortgages that were once guaranteed by the US government. These new regulations come in response to a number of legislators criticizing the loan sales, saying that they allowed hedge funds and private equity firms to profit without helping borrowers who were in need of some form of financial assistance. The program began in 2010.
HUD spokesperson Cameron French stated that these changes have been in the works for several months and are aimed at helping homeowners who are in financial distress. He also stated that the new guidelines will be announced within the week. These new regulations will not likely affect the next batch of loans scheduled to be auctioned off. The loans contained in this batch are all considered to be extremely delinquent, meaning they have not been paid back for 48 months.
Many expect to see changes to the guidelines that regulate the types of mortgage modifications that these private lenders can provide to borrowers in financial need. The National Consumer Law Center recently released a report that criticized these firms for offering borrowers modifications that only changed the interest on the loans, not the amount of money the homeowner owed. These modifications also often reverted to the original interest after five years, providing only a small, limited-time amount of relief.
Moneytips can help you refinance your existing home loan.