Federal Mortgage Legislation Signed into Law

The Federal Mortgage Law Bill - officially the ‘Helping Families Save Their Homes Act’ – was signed into law by President Obama on May 20th. The new law will “expand federal efforts to prevent mortgage foreclosures, shield mortgage service companies from lawsuits if they participate in federal loan modification programs, and give renters of foreclosed properties at least 90 days’ notice before eviction” according to The New York Times. The bill passed the House of Representatives by a vote of 367-54 and the Senate by a vote of 91-5.

The law though, does not include a provision that would have allowed bankruptcy judges to modify the terms of primary mortgages. That provision failed to get the 60 votes need in the Senate.

According to the Los Angeles Times, the law will “expand a $300 billion program that encourages lenders to write down an individual’s mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner’s high interest rate for a 30-year fixed loan backed by the Federal Housing Administration.

Click here to read the law as passed

Click here for a summary of the Mortgage Law Bill.

Click here to read the Associated Press story on the new law.