New Regulations May Reduce Bankruptcy Filings
Many people blame the mortgage industry for a major portion of the recent economic recession. Obama’s newly created government body, known as the Consumer Financial Protection Bureau or CFPB, is set to create new plans and tools to make understanding mortgage debt easier for the average consumer. The hopeful result of these new ideas is to help people make better borrowing decisions and reduce bankruptcy filings.
Helping Consumers Understand the Risk
One of the major problems with mortgage lending practices in the past was a lack of risk assessment and understanding on the part of the consumer. Many predatory lenders used this lack of understanding to trick consumers into taking out loans that they could not really afford. The new CFPB regulations will help eliminate this problem by providing consumers with easy to understand comparison sheets regarding the different lender options.
Hopefully these comparison sheets will help consumers choose a loan that is within their means so they can avoid debts that could lead to bankruptcy. According to a Chicago bankruptcy lawyer, high mortgage debts can force families into bankruptcy. The new regulations will also help to curb predatory practices at payday loan stores and help prevent students from making poor borrowing choices.
Because the predatory lending practices of the past have forced many Americans into declaring bankruptcy and because student loads cannot be discharged in bankruptcy court, the new mortgage regulations are aimed at preventing the need for bankruptcy in the first place. By making sure that consumers fully understand the risks and rewards of borrowing, the CFPB is hoping to prevent people from obtaining mortgages that they cannot afford. The program is also hoping to enlighten students with information so that they can make more informed decisions about how to pay for their education.
If you are were a victim of predatory mortgage lenders and need advice about whether or not to file for bankruptcy you can contact a Chicago bankruptcy attorney located at: 125 South Wacker Drive, Suite 300, Chicago, IL 60606 or by calling (312) 878-0035.