Sunday, May 24, 2009
President Obama Signs Two Important Acts Affecting Homeowners
President Obama signed into law the Helping Families Save Their Homes Act, and the Fraud Enforcement and Recovery Act (FERA), on May 20. The Helping Families Save Their Homes Act is aimed at helping homeowners by making mortgages more affordable and preventing "avoidable" foreclosures. As many as 9 million homeowners could benefit from this legislation. Obama, before signing the bill, said the bill "expands the reach of our existing housing plan for homeowners with FHA or USDA rural housing loans, providing them with new opportunities to modify or refinance their mortgages to more affordable levels." The original bill was criticized for the "cram down" provision, which according to critics would encourage borrowers to abdicate their responsibility towards loan repayment. The legislation, however, was ultimately passed without the cram down provision. FERA is a bid to revamp the outdated and ineffective laws governing mortgage fraud.