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Supreme Court makes it easier for borrowers to walk away from underwater homes

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Mortgage Professional America | 14 Jan 2015, 09:22 AM Agree 0
The U.S. Justices gave struggling home owners more ability to cancel their mortgages if lenders don’t provide the required disclosures -- a setback for the mortgage industry.
  • Wm Matz | | 14 Jan 2015, 11:59 AM Agree 0
    Contrary to the implication of the article, this decision will likely have little impact. For a borrower to benefit there would have to be 1) RESPA violation, and 2) the ability to tender the net balance of the mortgage. For underwater homes the borrower is unlikely to be able to tender via refinance and unlikely to have sufficient cash. So in most cases of RESPA violations borrowers will effectively have no remedy. However, if homes are not underwater, a refi tender may make for a viable option.
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