North Carolina gets new mortgage protection laws

I would like to share information about very important laws that were recently signed providing more protection to borrowers in mortgage transactions.

These 3 new state laws will help prevent lenders take advantage of people who are not in a position to afford mortgage, more so down the road when the terms of the loan may allow the rates to increase.

The laws were signed on Thursday and help to increase power of 1999 predatory lending law that was a model for the rest of the country. More powers have been added to the 1999 law as lenders had found new methods to trick people.

These laws protect homebuyers from ARM loans which they cannot afford at its maximum rate, Gov. Mike Easley said. Another requirement of this law is that the mortgage payments have to go towards the mortgage and not on hidden fees.

Even with having the highly praised predatory lending law of 1999, in North Carolina the foreclosure rate has increased by at least 230% in the last 8 years.

These new laws will give state banking commissioner more powers using which they can void & nullify loans without the requirement of having to go to court. Rep. Dan Blue, D-Wake, a primary sponsor of the bills has also said that these laws will give North Carolina power over out of state lenders who may buy a loan from another broker.

Colin