Bank of America Chief Executive Brian Moynihan announced the creation of the Legacy Asset Servicing group and appointed senior executive Terry Laughlin to run it. The unit is responsible for servicing the bank’s 1.3 million delinquent home loans, overseeing foreclosures and servicing discontinued residential mortgage products. “We believe this will best serve customers – both those seeking homeownership and those who face mortgage challenges – as well as our shareholders and the communities we serve,” said Moynihan.

In spearheading mortgage reform efforts, Dimon has decided to move ahead without the Obama administration’s plans for overhauling Freddie Mac and Fannie Mae. The White House, which is working with the Department of Housing and Urban Development and the U.S. Treasury regarding the future of the mortgage giants, recently announced a delay in releasing its report and recommendations. “We know that the situation that we have now is untenable. We are looking at how to transition from a government having too big a footprint in the marketplace to one that has the private sector playing the dominant role in the mortgage market,” said Treasury spokesperson Steve Adamske.

But Dimon has a clear vision of what mortgage reform should look like. Mortgage reform, says Dimon, needs to include standard national laws, standard foreclosure laws and standard servicing clauses, necessary consistencies to have a sound mortgage market. JPMorgan Chase is not without an unblemished record when it comes to questionable mortgages and faulty paperwork that contributed to the home mortgage crises. However, Dimon managed to keep JPMorgan Chase out of the subprime mortgage arena that brought down several major banks and nearly sent Bank of America and Citigroup into bankruptcy.

One can assume that Dimon, a Democrat, is among the financial leaders that are taking part in the quiet meetings on mortgage reform between the White House and banking officials. In December, Dimon was among the business leaders invited to take part in private Oval Office one-on-one meetings with President Obama to talk about the economy. For Dimon, his challenge is walking that fine line between being a leader on mortgage reform and looking out for what’s best for his shareholders. Dimon was quoted as saying, “I’m not as worried about JPMorgan as I am about our industry and our country.” However, that comment somewhat contradicts his actions. One only has to go back to last year when JPMorgan Chase aggressively spent more than any other Wall Street firm to aggressively lobby against the financial regulatory reform law.

Perhaps former President Bill Clinton has a more realistic view in responding to Dimon’s call for mortgage reform. “Dimon’s big test now will be whether he can figure out a way to influence public policy and direct his own bank,” says Clinton. “Can he continue to make money for his shareholders and lead in a way to finance the resurgence of America?”

This economic cycle has played out many times throughout our history. Unfortunately, the economy often improves faster than the damage that it did to the average family. Maybe you are one of those who has fallen victim to unfortunate economic conditions in the past but now you have began the rebuilding process and with that comes a new job in a new community.

With a new job often comes relocation and with relocation comes a new problem: You need a mortgage but have damaged credit. The good news is that the bad news may not be as bad as you think.

What’s Your Credit Score?

These days, anything less than a 680 credit score is going to cause you trouble getting a home loan. While it’s more difficult to get a home loan, it’s not impossible. There are a few strategies that you can employ to get the home.

First, you are going to have to face reality. Before shopping for your home, understand that until your credit improves, you will probably have to settle for a smaller home than you would like. You’re going to have to shop for bargains.

Remember that if you have damaged credit but your new job has left you in a healthy financial situation, buy a home that needs some work and slowly improve it. You don’t need good credit to install new carpet or paint the fence.

Get Prequalified

While it is a good idea for everybody to get prequalified for a home loan, it is even more important that those with damaged credit to get prequalified. You need to know what your credit limit will be before you go shopping.

Remember that the more money you can put down, the more receptive the lender will be to you. If you sold your home and saved that money, it would be ideal if you could put 30% down on your new home. For many, that will not be possible but keep in mind that many lenders are asking for much larger down payments than in years past.

While it’s always a good idea to pay off your credit cards, if you know you are going to be moving in to a new home, save the proceeds from the sale of your home as a down payment for your new home. Don’t use it to pay off your credit card. This is one of the few exceptions to always paying off debt as soon as possible.

Other Options

In the event that you cannot qualify for a home loan, all is not lost. Ask your lender if you qualify with a cosigner. If you still do not qualify, maybe you have a family member or friend who invests in real estate who could take out the loan and you could either rent from them or negotiate a deal where you can pay in to the equity of the home.

Regardless of your home, you want to keep your focus on rebuilding your credit. That may require you to rent a home for a period of time. Be patient and don’t try to live beyond your current financial status. You’ll get back on your feet in no time.

Washington, in the midst of the mortgage meltdown, has loosened requirements for such loans and it’s Businessweek’s contention that this is where many of the predatory lenders have moved toward.

Businessweek’s article covers one such lender, a company called Premier which, after filing for bankruptcy protection in the wake of federal indictments in 2007, has issued more than 2,000 taxpayer-insured FHA mortgages – $250 million in total.

Apparently, Premier failed to notify the FHA of its bankruptcy filing, which is required by law, but once again, existing regulations are not being followed up on, leaving the bill in the taxpayers lap.

Read the original article here.