May 25, 2010
Relief coming for unemployed homeowners
In an effort to keep the unemployed in their homes, the Senate created a provision to the Wall Street Reform Act that will lower mortgage payments for those facing foreclosure.
Under the bill, up to $50,000 may be lent to help cover mortgage payments. Homeowners must be in a situation where they can reasonably assume having the ability to begin mortgage payments again within 24 months. The Troubled Asset Relief Program will contribute three billion dollars in funding.
"Americans need help, 8 percent of all mortgage holders are currently at risk of losing their homes and that is unacceptable," said Pennsylvania Congressman Chaka Fattah.
The initiative is expected to help 5.5 million struggling homeowners.
The Wall Street Reform Act is designed to help consumers and potential homeowners. Many of the common practices that helped create the subprime lending crisis will be prohibited.
Under the act, more care must be taken to ensure borrowers are not taking on too much debt. According to the government, lenders will no longer be able to benefit from encouraging borrowers to take out high-cost loans.