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Matz urges CUs on Treasurys loan mod initiatives
WASHINGTON (3/29/10)—National Credit Union Administration (NCUA) Chairman Debbie Matz on Friday urged credit unions "to work closely with any of their members who find their finances under that an enhanced array of federal initiatives is available to mortgage lenders helping homeowners stay in their homes." "Credit unions should evaluate every possible remedy to help responsible borrowers–-especially those who are victims of the real estate market crash and those who are unemployed,” Matz added. Matz made her remarks in response to the U.S. Treasury announcement Friday on adjustments to its Home Affordable Modification Program (HAMP) and Federal Housing Administration (FHA) programs that will “expand flexibility for mortgage servicers and originators to assist more unemployed homeowners.” The changes, Treasury said, “will help the administration meet its goal of stabilizing housing markets by offering a second chance to up to three to four million struggling homeowners through the end of 2012.” The changes, according to the Treasury, will increase available assistance for unemployed homeowners that are searching for employment, provide mortgage servicers and lenders “more flexibility to reduce mortgage principal for underwater borrowers,” increase the incentives that are provided to servicers that take part in the Administration’s Making Home Affordable (MHA) program. The changes will also help ease “transitions to more sustainable housing for borrowers who do not succeed within the HAMP program” and will expand “opportunities to refinance into affordable FHA loans for underwater borrowers. Specifically, the Treasury said that unemployed borrowers that meet certain criteria “will have an opportunity to have their mortgage payments temporarily reduced to an affordable level for a minimum of three months, and up to six months for some borrowers, while they look for a new job.” The FHA refinancing programs, which are made available to borrowers who owe more than their home is worth, will be implemented “as quickly as possible” and the Treasury will soon provide greater details on this program. While some of the proposed improvements will be available sooner, the Treasury said it expects most if not all of the HAMP and FHA improvements to be fully implemented by the fall. The costs of these improvements will be borne by both private industry and the government, with the government portion of the cost being paid by a $50 billion allocation for housing programs under the Troubled Asset Relief Program (TARP), the Treasury said. The Credit Union National Association will be working with Treasury and NCUA and seeking more details of how the program will be implemented and will be provding more information to leagues and credit unions next week. For the full Treasury release, use the resource link.
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