High Cost Mortgages : A New Office Of Housing Counseling

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Subtitle C – High-Cost Mortgages redefines High-cost mortgage as a “consumer Credit transaction that is secured by the consumer’s principal dwelling”. These include credit transactions secured by a consumer’s principal dwelling whose interest rate is 6.5% more than the prime rate for similar transactions, subordinated mortgages secured by a consumers principal dwelling, points and fees, excluding mortgage insurance, and if the points and fees can be collected more than 36 months after a loan. New provisions are introduced for calculating adjustable rates alongside definitions for points and fees. When customers receive high-cost mortgages, they have to obtain pre-loan counseling given by a certified counselor. The Act also stipulates…show more content…
Council members are appointed to 3-year terms. The department will educate the general public in home ownership and home finance topics through coordinated media efforts. The Secretary of Housing and Urban Development is granted authority to provide grants to HUD-approved housing counseling agencies along with state Housing Finance Agencies to provide education assistance to various groups in home ownership. The Secretary is also instructed to establish a database used for tracking foreclosures and defaults on mortgage loans focusing on 1 through 4 unit residential properties. Subtitle “E” Mortgage Servicing Deals with rules concerning escrow and settlement procedures for people who have trouble repaying their mortgages, and it amends the Real Estate Settlement Procedures Act of 1974. In connection with a residential mortgage there should be an established escrow account for the payment of taxes, and hazard insurance. If the need arises, flood insurance, mortgage insurance, ground rents, and other required periodic payments can also be added. Lender will communicate with a borrower at least three business days before they close the specifics of the amount they need in an escrow account and the subsequent uses for the funds. If the consumer chooses to close an escrow, impound, or trust account or one is not established, the servicer must provide a timely and clearly written disclosure that
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