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For Florida short sales to succeed, and for Florida homeowners trying to avoid a foreclosure on their home, it’s important that there is mortgage financing available.  Seems obvious, but it’s not discussed as much as it should be.  The reality is that if home loans and mortgages aren’t available for Florida residential real estate, then there’s little hope that new homeowners, not investors, can come in an afford to buy property in a short sale.

Consumer Financial Protection Bureau Issues New Rules:  Regulations Designed to Help Borrowers and Force Fairness in Mortgage Dealings.

The availability of money to be lent on new home mortgages and mortgage modifications is vital to Florida home owners trying to overcome this Foreclosure Fraud housing situation.  Which means that the new federal agency, the Consumer Financial Protection Bureau, is important for Florida foreclosure defense and for Florida short sales since it exists to help people deal with things like getting fair dealing in home loans.

The Consumer Financial Protection Bureau (CFPB) has been around for awhile: it was created in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  This week, the CFPB has become especially important to Florida home owners with mortgage concerns, since the agency just announced new federal rules for borrowing with home loans and mortgages as well as new federal regulations which must be followed by mortgage servicers in the United States.

  The CFPB really hit the ground running in 2013 by issuing new federal requirements for home mortgages in Florida and elsewhere that include:

What the New Consumer Financial Protection Bureau Rules Will Do For Florida Home Owners and Mortgage Borrowers

Here are some of the things that these new regulations from the CFPB will do (this isn’t a complete list by a long shot):

1.  Mortgage servicers will not be able to start foreclosure proceedings until the borrower is 120 days behind in their mortgage payments.  This is intended to combat dual tracking.

2.  Mortgage servicers cannot finalize a foreclosure if the borrower submits an application for a mortgage loan modification at least 38 days before the home is scheduled for a foreclosure sale.  (Another tool to stop dual tracking.)

3.  Mortgage services cannot start foreclosure on the property if the borrower applies for modification of the home loan within 120 days of going past due on their mortgage payments. (A third tool to try and halt dual tracking.)

4.   Statements will be required for residential mortgages that are sent by the lender to the borrower on a regular basis and give basic information in clear terms:  things like payment history, the amount past due, contact information for representatives of the mortgage servicer, etc. must all be provided.

5.  Mortgage servicers have to provide the borrower with a name and a face and a phone number:  borrowers will know the person who is their contact point for the mortgage lender.

6.  Mortgage servicers will be keeping up to date records about mortgages with correct information on those home loans: this paperwork will be worthy of being relied upon by the borrower, the lender, the attorneys, and the courts.  Records have to be kept up to date for one year after some other entity takes over servicing the home loan.

7.  Force-placed insurance will no longer be a surprise slap in the financial face of the borrower:  under the new rules, lenders must act on a case by case basis and work with the borrower before determining there is a reasonable basis to obtain insurance on the property.

Larry Tolchinsky’s Tip:

These rules will help Florida home owners and Florida borrowers in the future, but they will not become federal law until 2014.  They do not impact today’s marketplace and the high volume of foreclosures that are predicted for Florida again this year.  Perhaps they can serve as examples to lenders in loan negotiations (this will be the law next year, why not follow its guidance now?) but they do not control what mortgage lenders and mortgage servicers are doing today.   The harms that these regulations are created to address will still be the reality that Florida buyers and Florida home owners face now, alongside their Florida foreclosure defense attorneys.  This is good news, but it’s going to come too late to the ball game for many many folks here in hard hit South Florida.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at, or (954) 458-8655.  If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments.  He’s happy to take your call.


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