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Hello, my name is Greg Phillips and I have been closing mortgages since 1999. I write articles about these industries to educate readers. My goal is to keep the articles simple and as uncomplicated as possible. Please visit my website for additional information about my mortgage services.
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S. 896 Helping Families Save Their Homes Act of 2009
Posted on May 20th, 2009 2 commentsClick Here To Join The Message Board Discussion
Today President Obama signed S. 896 Helping Families Save Their Homes Act Of 2009 into law. The bill places additional restrictions and requirements on Homeowners and Mortgage Servicers. It also gives government the authority to get more involved in the Loan Modification process.
It permanently enforces the $250,000 FDIC insurance on deposits. It establishes a Nationwide Mortgage Fraud Task Force to address mortgage fraud. There will be a toll free number to call and report fraud and the task force will have authority to investigate state and local legislation’s.
A mortgage servicer will no longer be able to initiate foreclosure without completing mitigation provisions in the title II of this act and they must use the Homeowner Affordability and Stability Plan.
A summary of the bill can be found here.
This actual bill is located here.2 responses to “S. 896 Helping Families Save Their Homes Act of 2009”
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My mortgage lender is Citi. After months of paperwork and phone calls, being on hold for hours, my bank informed me that I qualified for a loan modification. They gave me a trial period with an amount about $ 300 less than my mortgage. I finally received the package for the modification: they reduced my interest by about .5% for 5 years, but, get this, they INCREASED my principal by over $ 7,000! Then for years 5- term, the interest was only reduced by less than .5%.
I am so insulted by the time and effort that went into this for nothing. My guess is that most people wouldn’t even realize that they were increasing the principal. I asked why and she said something about putting my trial payments at the end of the loan. However, the payments were applied against my principal- unless I took the modification!
What a ripoff, I want to scream!
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If it is a ripoff I assume you rejected the offer?
The purpose of the program is to modify your original terms and lower your payments. Those who cannot afford their monthly payment view this as a great alternative to losing their home.
So, sometimes that involves stretching your term out for additional years, moving past due balances to the end of the loan, and/or reducing your interest rate.
I think this program is a great alternative to foreclosure or trying to cure your past due balance by entering a forebearance agreement which requires you to pay a higher monthly payment to cure your past due balance.
In the end I think the process is much harder than it needs to be. Hours on hold stinks!!
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