As a result of their easily approved status, mortgages played a major role in the economic crisis of 2008. Mortgage companies had to analyze and edit their lending procedures bringing policy provisions into effect.
Each mortgage company will differ on the provisions they expect their consumers to adhere to. Some of the provisions are regulated by the federal government, while others are the provisions formed by the companies themselves. These provisions in general, provide consumers with guidelines and options to exploring the terms of their loans. Insurance policy provisions can be implemented in any number of areas within a policy. Most of these provisions are established laws made to provide the consumer with extra coverage to further protect their investments.
One of the first laws governed is called the Truth and leaning act; made to counteract the many issues with mortgages being easily approved at certain periods over the years. This acts provides all details to loan payments, APR’s and finance charges. Another law implemented was the Fair Housing Act. Under this act the law explains the prohibition of discrimination in house related transactions. There is also the Fair Debt collection process Act, where the rights of consumers are protected by insurance companies prohibiting certain methods of debt collection. There are many other laws that have been established to better cater to the interest of investors.