President Barack Obama has announced steps that his Administration is taking to support homeowners and their families—providing relief for servicemembers and veterans, including those wrongfully foreclosed upon or denied a lower interest rate on their mortgages, and reducing fees for Federal Housing Administration (FHA) borrowers looking to refinance. Along with the President’s broader plan to help millions of Americans refinance and save thousands of dollars a year, support the communities hardest-hit by the housing crisis, and help families avoid foreclosure and stay in their homes, this is part of the President’s overall strategy to support responsible homeowners and the housing recovery.
On top of the historic settlement completed by the Federal government and 49 state Attorneys General last month, major servicers will be providing significant relief to thousands of servicemembers and veterans. Under the agreement, they will:
►Conduct a review 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 to 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.