Everyday Cheapskate

Last month, the U.S. Congress passed and President Barack Obama signed into law the Helping Families Save Their Homes Act. Gibran Nicholas, chairman of the Certified Mortgage Planning Specialist Institute, an organization that certifies mortgage bankers and brokers, says, "There are five primary sections of the new law that will benefit homeowners and consumers." Here is a brief summary of those changes:

—Benefit No. 1: Loan Modifications and Short Sales Should Get Easier. The new law requires a servicer to modify a loan and approve a short sale, as long as: 1) Default on the mortgage is reasonably foreseeable; 2) the homeowner is occupying the property as a permanent residence; and 3) the mortgage company would be able to recover more from the loan modification or short sale than it would by foreclosing on the home.

—Benefit No. 2: New and Improved FHA Hope for Homeowners Program. This new law modifies the Federal Housing Administration's Hope for Homeowners program, which was launched in 2008 and turned out to be virtually useless. Until this new law modified last year's program, only one family qualified for that program, according to some reports. This new version makes it more attractive to lenders to participate, which should generate more participation.

—Benefit No. 3: FDIC Insurance Limit of $250,000 Extended to Dec. 31, 2013. This doesn't have much to do with home mortgages, but it's part of this law.

You may recall that your deposits in banks were insured by the Federal Deposit Insurance Corp. for up to $100,000. That was increased to $250,000, but for only one year, expiring at the end of 2009. That has been extended through 2013.

—Benefit No. 4: Borrower Must Be Notified When Ownership of Mortgage Changes. That seems pretty reasonable, but in the past, it was not required. Previously, the owner of the mortgage was not necessarily the servicer. Now borrowers must be notified when their mortgages are sold to other companies, even if the servicers of the mortgages remain the same.

—Benefit No. 5: Tenants Are Better-Protected When Landlords Are Foreclosed On. A tenant now is allowed to occupy his property until the end of his lease term, even if his landlord goes through foreclosure. If the new buyer intends to occupy the home as his primary residence, the tenant must be given 90 days' notice before being forced to leave.

If you have a mortgage and believe this new law may benefit you in some way, call your loan servicer to find out. Ask questions; don't be intimidated; and know with certainty what any change to your current situation would cost you in fees, if any. For more information, visit http://www.MakingHomeAffordable.gov.

Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including her latest, "Can I Pay My Credit Card Bill With a Credit Card?" You can e-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

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