President Obama has signed into law the "Helping Families Save Their Homes" Act, designed to help homeowners who are having difficulty making their monthly mortgage payments refinance to an affordable rate, and help homeowners increase the affordability of their mortgages, and avoid preventable foreclosures.
"These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again," said President Obama.
The new act strengthens provisions in the existing Hope for Homeowners program, requiring principal writedowns by lenders to help homeowners increase the value of equity in their homes. The eligibility requirements of refinancing underwater mortgages will also be eased, allowing refinancing for a greater number of borrowers.
In addition, the Act also has provisions to help restore the credit flow in the US economy, including an extension of the temporary increase in the Federal Deposit Insurance Corporation's (FDIC) deposit insurance limits providing added confidence to borrowers, but also increases the borrowing authority of the FDIC to $100 billion. The Act also increases the borrowing authority of the National Credit Union Association (NCUA) to $6 billion.
A press release on the new law from The White House in Washington, D.C. can be found HERE.
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