Warren Applauds FHA Loan Modifications As Helping MA Homeowners
Tuesday, October 01, 2013
"This policy change will reverse the discrimination against seniors, veterans, and single mothers in the FHA's loan modification program and give them a better chance to save their homes," said Senator Elizabeth Warren (D-MA). "I applaud Commissioner Galante and the FHA for making this change, which is good for families and will help make the FHA's loss mitigation program more effective."
How It Works
Before this policy change, only employment related income could be considered in determining whether those facing foreclosure were eligible for loan modification. The new policy allows other steady sources of income to be considered, allowing unemployed and retired homeowners the opportunity to keep their homes. According to a press release by the office of Senator Warren, the FHA announced the change in Mortgagee Letter 2013-32, which updated guidance on how "continuous income" other than wages is defined for Loss Mitigation evaluations.
“I think it’s a hugely important change, particularly given the diversification of the job market and how people are getting income these days,” said Grace Ross, a former candidate for Massachusetts Governor and Director of the Massachusetts Alliance Against Predatory Lending.
Will It Help?
Ross said the FHA is a generally effective and evenhanded program. She said the change illustrated its adapting to the current economy, one in which less people have steady employment and more are in need of loan modification.
“This is a good, smart, and positive change,” she said.
Senator Warren and Senate Banking Committee Chairman Tim Johnson (D-SD) began advocating for the change in July when they coauthored an Amendment urging the Administration to adopt this policy. Earlier this month, Chairman Johnson and Senator Warren sent a letter to Federal Housing Commissioner and Assistant Secretary for Housing Carol J. Galante urging the FHA to adopt the change.
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