The new regulations that were imposed by the Consumer Financial Bureau have caused outrage among consumer groups who believe that these regulations will provide lenders protections and additional benefits more than borrowers. The new regulations, that were explained yesterday, include provisions that forbid lenders from issuing different mortgages to individuals who can’t prove that they can actually afford it. On the other hand, consumer advocates believe that these regulations will provide legal shields for financial institutions.
For example, when a specific loan ends u meeting the brand new lending criteria, it will end up in becoming a mortgage that is qualified. This will result in the banks being protected from any lawsuits that will be filed in the future by mortgage buyers and aggrieved borrowers. There is also a risk that the qualified standards will end up in inviting abusing lenders who will take advantage of this decision. However, lenders are still going to be able to provide loans for individuals who have a stable income and can afford to pay back their mortgage debts. Even though this loan will comply with the new regulations, there is always a chance that the borrower can lose their house and credit rating if they are not able to pay back their lender. If this ends up happening, the borrower won’t even be able to sue the lender in any way. This is a regulation that many experts found strange and have asked the bureau to consider changing.
Consumer groups view these regulations as completely unnecessary and that there were already enough problems with the old regulations. Many lawyers are now threatening to file lawsuits against some community banks if problems take place with lenders. These lawyers claim that they will still be able to file them according to the law even if the new regulations don’t allow them to.
Consumer groups argue that this decision took place after Florida homeowners began suing the state and various banks for ruining their credit rating and taking their homes away from them during the mortgage and economy crisis. Many of them even believe this is a plot to protect the banks from paying the money to homeowners who went through a lot during the past few years. No one knows if the outrage from consumer groups will result in the new regulations getting cancelled but for now, it is obvious that they are going to be imposed whether homeowners and consumer groups like it or not.
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