Thursday, May 21, 2009

U.S. Offers More Help In Preventing Foreclosures

OBAMA SIGNS LEGISLATION The HOPE for Homeowners foreclosure prevention program began in October with expectations that 400,000 troubled borrowers might get help staying in their homes. Seven months later, the reality has been quite different: Just 51 homeowners nationwide have benefited from the program so far. But on Wednesday, legislation signed into law by President Barack Obama loosens restrictions on the program and addresses a broad range of other issues related to housing — homelessness, renters' rights in foreclosures and counseling for distressed borrowers. The legislation, led by Sen. Christopher Dodd, D-Conn., is expected to make it easier for homeowners to refinance into a lower-cost mortgage backed by the federal government. Housing Bill Signed into Law Help for Distressed Homeowners: Expands eligibility for federal "Hope for Homeowners" foreclosure prevention program by lowering fees, streamlining borrower documentation requirements and allowing incentive payments to servicers and originators who participate in the program. "Safe Harbor" for Loan Servicers: Servicers who modify a loan under the president's "Making Home Affordable" foreclosure prevention program or refinance into a Hope for Homeowner loan would be protected from investor lawsuits. Counseling: An additional $130 million is allocated to prevent foreclosure through more counseling, including more workers in field offices. Some of the funds would be used to educate consumers about the dangers of foreclosure scams. The Homeless: The bill steps up aid to the homeless, including $2.2 billion for programs to address the needs of the homeless and the effects of homelessness on communities. Renters: Banks must honor existing rental leases on foreclosed properties, or month-to-month leases for a minimum of 90 days. If the property is sold to a buyer who will live there, the renter must get 90 days notice. Right to Know: Borrowers must be notified of who owns their mortgage if it is sold.

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