Federal Daily News
Financial relief coming in wake of mortgage abuses
Like others who struggled to hold onto their homes during the recession, many military service members and vets suffered mortgage abuses at the hands of loan servicers. Many lost homes or were forced to sell them at a loss when they were unable to pay or renegotiate their mortgages.
However, this month President Obama announced a range of new measures aimed at squaring up things for servicemembers and vets who were hurt by those practices during the economic downturn.
According to a White House fact sheet, additional remedies to help vets were added to a $25 billion settlement the federal government and state attorneys general completed with major loan servicers last month. Under the new measures outlined March 6, major loan servicers will be required to:
- Review records of every servicemember foreclosed upon since 2006 and provide any who were wrongly foreclosed upon with compensation equal to a minimum of lost equity, plus interest and $116,785;
- Refund servicemembers money lost because they were wrongfully denied the opportunity to reduce their mortgage payments through lower interest rates;
- Provide relief for servicemembers who are forced to sell their homes for less than the amount they owe on their mortgage due to a permanent change in station;
- Pay $10 million dollars into the Veterans Affairs fund that guarantees loans on favorable terms for veterans; and
- Extend certain foreclosure protections afforded under the Servicemember Civil Relief Act to servicemembers serving in harm’s way.
The White House also said the Federal Housing Administration will cut fees for refinancing loans that are already FHA-insured, a move that could lower costs for several million eligible borrowers.