Responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default. Risk of default might involve a mortgage payment that has reset and is no longer affordable, a significant loss of income or other types of hardships.
A city in California has become ground zero in a battle with mortgage lenders and now the federal government in its push to implement a radical new plan to assist homeowners who cannot meet the terms of their loans.
The Bay Area city of Richmond is the first to push for the use of eminent domain in a plan that would see mortgages in repayment delinquency seized from lenders and investors, or rather sold at a deep discount, by the city, and then refinanced on behalf of borrowers with more affordable terms.
The US Federal Housing Finance Agency, which regulates mortgage giants Fannie Mae and Freddie Mac, has now said that it will move to halt the use of eminent domain by cities to seize underwater mortgages from lenders.
Richmond, a working-class city of 106,000 people in the East Bay, has a large population of both blacks and Latinos, and was hard hit by the US housing crisis, with homeownership rates considerably below the national average according to the LA Times.
Housing Recovery Taking Hold, but Income Growth Still a Concern
During a Bipartisan Policy Center forum Tuesday, experts generally agreed the housing market is on the path to recovery, but the strength of the national recovery remained in question.
According to the Bureau of Labor Statistics, the unemployment rate fell t in July, but average hourly earnings and average weekly hours worked also decreased.
Court Rules Borrowers Can Fight Bank’s Decision to Deny Modification
Homeowners who are denied a modification under the Home Affordable Modification Program (HAMP) even after completing a trial period plan (TPP) have legal standing to sue their lender, the 9th U.S. Circuit Court of Appeals in San Francisco ruled Thursday. Reversing a lower court dismissal, the “panel held that the district court should not have dismissed the plaintiffs’ complaints when the record before it showed that the bank had accepted and retained the payments demanded by the TPP,” the court opinion stated.