New mortgage loan regulations go into effect Friday

CENTRAL FLORIDA — New federal regulations go into effect Friday, designed to protect homeowners from the traps that led to a foreclosure crisis across the nation and in Florida.

WFTV reporter Marisa Mendelson obtained details on the new rules from the Association of Realtors' office in Orlando.

The new regulations add more protections for homebuyers, but there are some things realtors want buyers to be aware of.

In the past year, Orlando has ranked in the top 10 in the nation in foreclosures.

And research firm Realty-Trac put the city at the top of the list of cities with too many homes with underwater mortgages.

But now, there may finally be some hope for homebuyers in central Florida, thanks to new federal regulations that kick in Friday.

"The mortgage they're going to receive to purchase a property is something that their financial circumstance will allow them to repay without a struggle," said realtor Iona Harrison.

The new rules require lenders to make sure borrowers can realistically repay a loan before one is issued.

Also, banks need to prove borrowers can afford a long-term mortgage, not just during a low, introductory rate period.

"We want them to be comfortable with the terms of that loan. We want them to feel as confident as possible that this is the very best decision they can be making for themselves and their families," Harrison said.

Even though the new regulations are meant to help homebuyers, realtors warn that they will need to fill out more paperwork and the loan approval process may take longer.

WFTV