The Consumer Financial Protection Bureau (CFPB) has unveiled new educational materials for consumers to promote better understanding of the new mortgage Ability-to-Repay Rule, which will go into effect on 10 January 2014.
The new materials include sample letters, mortgage tips, consumer tools, and factsheets on the rules. The Bureau has also released a reference guide for housing counsellors, who interact with struggling customers.
Under the new mortgage rule, which aims to protect consumers from debt traps, lenders should analyse a customer’s income, assets, savings, and debts, and ensure their capability of making monthly payments before providing loan.
The Ability-to-Repay rule also protects struggling homeowners, including those facing foreclosure, from costly surprises and run-arounds by their servicers.
CFPB director, Richard Cordray, was quoted by huntingtonnews.net as saying that taking out a mortgage to buy a home is one of the biggest decisions a consumer can make.
"We want to make sure that people are aware of their new protections so they have the knowledge to make sound decisions about their financial futures," Cordray added.
The CFPB is currently working with industry, housing counsellors, and other consumer groups to smoothly implement the new rules.