I've been talking to many potential home sellers in North Carolina, and I'm finding that a lot of them share a common complaint: they're having trouble qualifying for bridge loans to enable them to buy another home while their existing homes are still for sale.
I remember in the go-go '90's having lenders approve my wife and me for $300,00 or $400,000 mortgages, and no hassles at all getting a bridge loan to carry us through until our old home sold.
Of course, we didn't buy any $400,000 homes. We were much too frugal to do that. But the folks I'm talking to in North Carolina aren't spendthrifts, either. They just need some flexibility from lenders to get the financing they need to sell their homes.
If GM can get billions, how about the housing industry? At least we're not going to go bankrupt next year after taking billions from the government.
From what I hear, things aren't much better in Kentucky, either.
Tuesday, July 21, 2009
Wednesday, June 17, 2009
New Legislation Affecting North Carolina Mortgages
2007 and 2008 saw revisions to North Carolina mortgage laws designed to ward off future problems with subprime mortgages and deceptive lending practices.
HB1817, signed into law by Governor Easley in 2007, tightens up restrictions on North Carolina mortgage lenders. The law defines subprime mortgages using the Federal Home Disclosure Act definition. The new law prohibits prepayment penalties, requires that lenders verify an applicant's ability to repay a loan at the fully indexed rate, and requires verification and documentation of the applicant's income. In other words, no more stated doc or no doc mortgages.
The new law also sets forth stronger language defining a broker's duties to borrowers, and puts more stringent requirements on the broker to provide borrowers with a "reasonably advantageous loan."
HB1817 also prohibits certain practices, such as brokering an adjustable rate mortgage without disclosing to the applicant the terms and costs associated with a fixed rate loan from the same lender at the same rate for which the applicant would qualify, failing to comply with all federal laws and regulations, and engaging in deceptive or misleading applications. The law also gives the North Carolina Commissioner of Banks broad authority to ban practices that the Commissioner finds to be unfair, deceptive, designed to evade the laws of North Carolina, or which are not in the best interests of the public.
Laws enacted in 2008 have been designed to help homeowners who are facing foreclosure. HB2623 requires North Carolina mortgage lenders to give at least 45 days' notice before foreclosure proceedings begin, and also gives the Commissioner of Banks the authority to extend the process an additional 30 days to enable borrower/lender negotiations to save the home. The law also provides $600,000 in grants to non-profit counseling agencies to help homeowners facing foreclosure.
House bill HB2463 regulates North Carolina mortgage lenders by requiring loan servicers to be licensed, and imposes new standards on lender's activities. Lenders are prohibited from refusing to reinstate a delinquent loan once it's paid, failing to mail a 45-day foreclosure notice, failing to make timely payments from an escrow account, and other unsavory practices.
The new restrictions on North Carolina mortgage lenders are not as strict as legislation in other states. For example, new legislation affecting Kentucky mortgage lenders will modify foreclosure laws that already some of the most strict in the nation.
HB1817, signed into law by Governor Easley in 2007, tightens up restrictions on North Carolina mortgage lenders. The law defines subprime mortgages using the Federal Home Disclosure Act definition. The new law prohibits prepayment penalties, requires that lenders verify an applicant's ability to repay a loan at the fully indexed rate, and requires verification and documentation of the applicant's income. In other words, no more stated doc or no doc mortgages.
The new law also sets forth stronger language defining a broker's duties to borrowers, and puts more stringent requirements on the broker to provide borrowers with a "reasonably advantageous loan."
HB1817 also prohibits certain practices, such as brokering an adjustable rate mortgage without disclosing to the applicant the terms and costs associated with a fixed rate loan from the same lender at the same rate for which the applicant would qualify, failing to comply with all federal laws and regulations, and engaging in deceptive or misleading applications. The law also gives the North Carolina Commissioner of Banks broad authority to ban practices that the Commissioner finds to be unfair, deceptive, designed to evade the laws of North Carolina, or which are not in the best interests of the public.
Laws enacted in 2008 have been designed to help homeowners who are facing foreclosure. HB2623 requires North Carolina mortgage lenders to give at least 45 days' notice before foreclosure proceedings begin, and also gives the Commissioner of Banks the authority to extend the process an additional 30 days to enable borrower/lender negotiations to save the home. The law also provides $600,000 in grants to non-profit counseling agencies to help homeowners facing foreclosure.
House bill HB2463 regulates North Carolina mortgage lenders by requiring loan servicers to be licensed, and imposes new standards on lender's activities. Lenders are prohibited from refusing to reinstate a delinquent loan once it's paid, failing to mail a 45-day foreclosure notice, failing to make timely payments from an escrow account, and other unsavory practices.
The new restrictions on North Carolina mortgage lenders are not as strict as legislation in other states. For example, new legislation affecting Kentucky mortgage lenders will modify foreclosure laws that already some of the most strict in the nation.
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