Two new regulations were created in North Carolina to assist homeowners with foreclosure filings. State regulators have created new laws and regulations that resulted in the creation of a rule that states once a homeowner asks their bank or lender for a loan modification, any foreclosure filings that the borrower may be involved with or facing must be delayed or stopped while the loan modification is being reviewed.
This is a major improvement in the current process. In the past, banks and lenders that were pursuing a foreclosure action against a homeowner did not have to stop the process. In the past they were able to pursue a foreclosure against the home as they worked with the borrower. That process put homeowners up against the clock, created additional stress, and would more than likely cause the homeowner to lose their home.
So this new regulation will ensure that homeowners have time to negotiate with their lender in order to find a solution that works for all parties. The state government of North Carolina created this new rule as they believe that the mortgage industry has failed to prevent as many foreclosures across the state and the nation as they could have. They believe that that there are some significant flaws in the system when it comes to loan modifications. The new laws and regulations that have been adopted will help homeowners have a better chance of avoiding foreclosure when they have the ability to stay in the home over the long term. Refer to The Consumer Economic Protection Act, and this law will provide the family in North Carolina with up to 60 additional days to work with the bank or lender.
In addition to the new program mentioned above, a second regulation has been enacted by the state of North Carolina. This second, new regulation will require that mortgage servicers, banks and lenders respond promptly and rapidly when homeowners ask for assistance on their mortgage payments. Numerous studies have shown that a lack of, or a breakdown in communication, between the homeowner and the lender can lead to foreclosure. So this rule will ensure that some type of communication occurs.
These new regulations take effect June 1, 2010. They will apply to all banks, mortgage brokers and other lenders in North Carolina, whether they are local or national companies. However, note that these new rules do not apply to savings and loan institutions.
However, S&Ls have not historically been problems in the housing crisis across the nation. Also, community banks and other state-chartered banks, such as savings and loans, haven't been a problem on the foreclosure front. The new regulations have also been approved by the banking commission.
To learn more about the regulation, dial 919-877-5700, which is the North Carolina Housing Finance Agency. Or you can click here for details on the state’s foreclosure hotline, which can also provide more information.
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