New Mortgage Laws: Will They Affect Your California Home Loans?

By Sheryl Landrum Columnist

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As the nation struggles with the record amount of home mortgage foreclosures, new bills are being introduced to Congress to try and stem the foreclosure tide. What are these bills and how could they affect your new home loan?


Raising the Limit for Lower Interest Home Mortgages

A major reform bill that would really help California home loans is the Federal Housing Administration Modernization Act. Currently the mortgage loan limit is 417,000 for conforming or government backed home loans. These mortgage loans are generally easier to qualify for and offer lower interest rates than home loans above the conforming loan limit. Raising the conforming home loan limit in high cost California would make it easier for homeowners to refinance out foreclosure prone adjustable rate mortgages into lower fixed rate home loans.

Add Impound Accounts to Your Home Mortgage and Avoid Foreclosure

Another law that is on the table would prevent borrowers from getting high cost, sub-prime mortgages without impound accounts. Adding to the high rate of mortgage foreclosures is failure for homeowners to pay their property taxes and insurance. Adding impound accounts to the mortgage payments and making sure that borrowers are qualified for mortgage loans that include these payments should help to ease foreclosure problems.

These two bills were introduced this October as well as other bills designed to help California homeowners stay in their homes and to curtail unscrupulous lenders. Two other bills being considered are allowing homeowners in default to access retirement funds without penalty and the requirement of state licensing for all California home loan officers. Hopefully these bills will pass quickly and offer some home mortgage relief to Californian as well as nationwide homeowners.

The San Diego Union Tribune, Sunday, October 28, 2007, New Relief Bills Address Borrowers, Appraisals, by Kenneth Harney.

About the Author
Sheryl Landrum is a Loan Officer with First Capital Mortgage of San Diego, California and a freelance writer specializing in mortgage issues.

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