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Amendment to financial reforms approved, while debt management plan could help as consumers wait
By Angela Hawke on May 14th, 2010
One thing that may have put some consumers in debt trouble is being steered into home loans that are difficult to pay off.
However, the U.S. Senate recently passed an amendment that should help consumers from being offered mortgage they cannot handle. Through the change, lenders and originators of home loans will not be able to get compensated on the basis of a mortgage's interest rate or other terms.
"We took a huge stride forward today in the fight to restore fairness for homeowners and strengthen the financial foundations of our families," said Oregon Senator Jeff Merkley, who co-sponsored the amendment.
Lenders would have to also create standards that would ensure consumers can pay the loans they are offered. The amendment affects financial reforms being considered by the Senate, which would further regulate products offered to consumers, such as credit cards and mortgages.
For some homeowners, these types of protections may come too late as they face bills they cannot pay. However, these people could find help in a debt management plan, which could reduce how much interest they pay on credit card debts.
As a result, they may have more money left over to help pay down their mortgage and avoid foreclosure.
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