Real Estate Finance & Investment Business Foreclosure consultants are expected to increase
Under a new bill (LB1230) introduced into the Nebraska Legislature consultants are restricted as to the advice they can give, homeowners have the opportunity to rescind any agreement which removes their home equity, and consultants are barred from asking for title to the property.
The bill is similar to ones in place in eight U.S. states already, including one passed in Colorado last year. They are designed to protect consumers from questionable practices in the foreclosure consultancy businesses, which are springing up all over the country.
Foreclosure consultants are expected to increase due to the tremendous increase in the number of foreclosures in this country.Â
According to the Center for Responsible Lending, foreclosures rates for subprime loans made during the last two years are expected to double. This chilling projects means that as many as one in five subprime mortgages which originated during the last two years could end up in trouble. Subprime loans are those made at higher interest rates and sometimes with complicated financing structure. For example the loan known as a 228 has two years of fixed interest rates and then is allowed to increase sometimes to dramatically higher levels in a short period of time. In many cases, the 228 loans are starting to arrive at the point where the interest begins to increase which leads experts to believe that foreclosure rates will also increase.
Another factor impacting the foreclosure rate is the cooling housing market which means people seeking to refinance their houses to avoid potential foreclosure no longer have equity to show in order to refinance.
While there are an increasing number of foreclosures and an increasing number of foreclosure consultants, the legislation is intended to prevent the consultant from obtaining the deed to a $100,000 house with $75,000 owing and pocketing the profit based on the $25,000 equity in the house. The bill was crafted by members of the State Banking Department and is aimed at the few ‘bad apples' who take unfair advantage of people at a most vulnerable time.
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Bob Smith is the writter of Mostlyforeclosures.com. For more information on Nebraska Pre Foreclosures Home please visit http://www.mostlyforeclosures.com/.
Related Tags: foreclosed homes, distressed houses, bank foreclosure lists in, repossessed, foreclosed properties in ne, ne bank foreclosure listings, hud forclosed
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