There are new signs tonight the nation's housing market remains on unstable ground. The number of Americans more than 60 days late behind on their mortgage payments is much higher than it was a year ago. And the number of people losing their homes to foreclosure is also on the rise.
Information is key to prevent further foreclosures and another mortgage meltdown. To do that, the Federal Reserve has just issued a batch of new proposals:
- Lenders would be required to fully disclose to borrowers how their payments could potentially fluctuate over time, especially in the case of adjustable rate mortgages.
- Lenders would also need to provide details on a "worst case scenario", the maximum interest rate and payment a borrower would have to make. Balloon payments, due at the end of a loan's term, would have to be fully disclosed as well.
- The Fed also wants to make sure that those who enter into reverse mortgages, a financial tool increasingly used by older Americans to tap into their home's equity, know what they're getting into.
The more information a homeowner is armed with, the less chance of falling behind on their mortgage payment , and losing their home to foreclosure.