Staff Writer, May 13, 2009
The United States Congress recently voted to pass legislation that would encourage banks to spare their homeowners from foreclosure. The bill, which is known as the Helping Families Save Their Homes Act was approved by a vote of 367-54 in the House of Representatives and of 91-5 in the Senate. The final version of the bill was approved with unanimous consent.
The legislation will expand upon a $300 billion program, which will expire in 2011. Lenders are being encouraged to write down their borrowers’ high-interest rates for a 30-year fixed loan if the homeowner agrees to pay an insurance premium. The loan will be backed by the Federal Housing Administration.
Also, the law change will expand the number of people who are eligible for the break. Previously, participants who have defaulted on a mortgage or who have other substantial debt are not included. However, now only those who have defaulted in the last five years will be ineligible.
The bill also extends an increase in the FDIC’s deposit insurance from $100,000 to $250,000 until 2013.
