Where can I get a home LoanHow can I get a mortgage loan?
US fiscal reform: Mortgages Act and Anti-Predatory Lending Act
Chapter XIV of the Act, known as the Act on Malta's Property Reform and Anti-Predatory Lending, lays down certain basic rules for the granting of housing finance, governs the remuneration of real estate agents and extends protection and transparency for lenders. Legislation lays down certain government norms for home loan products to make sure that users are kept up to date and can make their payments on home loan guarantees.
Much of the new standard listed below is likely to affect the activity of a "mortgage lender", i. e. any individual who obtains a housing permit, supports the borrower or negotiated credit terms: Mortgagors must be recorded and licenced in accordance with local laws, and this information must appear on all loan documentation.
Mortgagors cannot lead the consumer to a loan that they cannot reasonably pay back, from a "qualified mortgage" to an "unqualified mortgage" or to a loan with "predatory characteristics". "Defining a qualifying mortgages establishes a number of conditions, which include the fact that periodic disbursements, as provided for, must not raise the amount of capital of the loan so that there can be no adverse amortisation; the conditions do not involve paying a bonus; asset values and proceeds must be validated and recorded; debt/income relationships must be respected; points and charges must not be higher than three per cent.
Mortgagors can only be indemnified according to a wording basing on the nominal loan amount, although incentives are granted to brokerage firms on the basis of the number of credits granted in a given timeframe. "Return premiums" are forbidden when a brokers is remunerated for giving a higher interest rates to a customer in return for lower upfront commission.
Advance payment fines are not permitted for unqualified mortgage loans. Advance payment fines for qualifying mortgage loans may not be more than three per cent in the first year of the loan, two per cent in the second year of the loan and one per cent in the third year. After the third year of the loan, no advance payment fine is permissible.
Truth in the loan application process. The lender is forbidden to disregard the creditworthiness of an investor, the available construction financing or the estimated value of a home. Creditors must give six months' advance notice before a variable interest hybride loan (ARM) is deferred with an estimation of the upper limit of the amount to be paid per month and an outline of other available policy option available to the lender, such as funding, re-negotiation of loan conditions, lenient payments and enforcement sale.
States such as California with an "Anti Defects Act" (in which the Mortgagor is not responsible, under certain circumstances, for the difference between the selling prices of the Collateral and the amount of money owed by the Mortgagor) require the Mortgagor to describe the level of legal protections and their implications for the Mortgagor. Extended consumer protections for high-cost mortgage loans.
This law lowered the level of what is a "high costs mortgage" to those that exceed 6.5 per cent on the first and 8 per cent. 5% for subordinated loans - and charges and points that exceed 5% of the amount of the deal. Under the Truth in Lending Act, high-priced loans will be subject to amendments to prohibit balloning, expedited debt, modifications and certain other fee categories - and to require further disclosure.
Underwriting minimum standards for mortgages. Creditors must make a "reasonable and bona fide determination" that the borrower has "reasonable capacity to pay back the loan" on the basis, inter alia, of proven loan histories, sources of revenue and debt-to-income ratios. The lender may be held responsible for the higher amount of real damage, or three time the total amount of money disbursed to the lender, plus legal expenses.
Borrower may claim that the borrower has infringed the law by defending the repayment of the loan or by offsetting the amount against the amount in a court enforcement suit. It prescribes a number of surveys and reporting related to the hypothecary reforms, among them (1) a survey on how best to ensure "widespread use" of shares based on appraisal loans (SAMs) where the creditor accepts a lower interest payment in return for part of the estimated value of the real estate; (2) a survey on the impact of the law on the accessibility and affordable nature of loans to the consumer;
3 ) a survey on "root causes of non-payment and enforcement of housing loans"; 4 ) a survey on evaluation methodologies and evaluation modelling; 5 ) a survey on inter-agency effort to combat enforcement fraud and "emerging credit modifying systems"; and 6 ) a survey on the impact on enforcement of housing mortgages and the existence of non-life insurances due to dry construction introduced from China between 2004 and 2007.
Costs of acquiring a private mortgages can rise significantly as creditors are obliged to comply with the new reporting obligations and subscription rules, which may involve the recruitment of extra personnel and is likely to involve more red tape.