It has been announced that mortgage brokers and lenders in New York have been instructed to give house buyers better information, concerning loan terms and conditions. Guidelines issued by the Department of Housing and Urban Development require loan sources to provide reliable estimates of closing costs.
It has been difficult for prospective buyers to properly assess cost, for comparison with what is available elsewhere, in the mortgage market. There have been a flood of foreclosures many of which are reckoned to be associated with over zealous lending policies, and many people have not had a clear understanding of their liabilities.
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In future prospective buyers will be given closing costs estimates, so that they will be clear about their obligations, and be equipped to shop around for the best deals. It is thought that in some instances the new system could save borrowers hundreds of dollars.
Although the guidelines do not provide for penalties against banks who do not comply with the new procedures, borrowers would be in a stronger position to sue should the need arise. The new arrangements cannot cover every eventuality but they are welcome, as they have come at a time when many borrowers have been hit by unforeseen circumstances, and they are the first changes of this sort for thirty years.
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