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New Bill to Help Homeowners with Foreclosures October 1, 2009

Posted by John Watch in Uncategorized.
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“Voluntary efforts to keep families in their homes have failed,” said Senator Dick Durbin (D-IL).

Mortgage delinquencies are rising and the voluntary HAMP program implemented so far is slow to repair the damage. Mortgage Assistance Programs have been created to weather the mortgage storm, but little remains resolved. The Preserving Homes and Communities Act of 2009, headed by Senator Jack Reed (D-RI), aims to aggressively curtail this situation threatening a recovery.

The Bill: (from Bloomberg.com)

  • Require lenders to evaluate all borrowers for affordable loan-mods. before initiating foreclosure
  • Require banks to offer and approve a loan-mod if the restructured mortgage returns more money (net-present value) to investor than would foreclosure
  • Establish new penalties and would let borrowers overturn foreclosures if lenders fail to comply
  • Place limits on fees charged in foreclosure

The Mortgage Bankers Association and others have many concerns with the bill, as making modifications mandatory could be problematic for market recovery. What’s important here is that people are coming together, sharing ideas, making plans and devising solutions for this housing crisis. As we move into recovery, it will take the collective thought and desire for resolution to witness a turn in the housing market.

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