President Barack Obama and his administration are set to announce new financial regulation that will provide extended relief to military servicemembers and veteran homeowners.
These reforms are part of a broader plan to help millions of underwater and delinquent homeowners outlined in the president's most recent State of the Union address. In recent years, mortgage records show that a number of military personnel were wrongfully foreclosed upon and denied more affordable mortgage rates that should have been guaranteed to them.
Under the new changes, lenders and servicers will conduct a review of all servicemembers foreclosed on since 2006. If after examination, it is determined the foreclosure was wrongful, the military borrower in question will be entitled to compensation equal to the lost equity plus interest and a guaranteed $116,785.
Additionally, military homeowners who were denied a refinance will also be entitled to compensation equaling the money they lost be being unable to lower their monthly mortgage payments with a more affordable interest rate. Relief will also be provided for military personnel who were forced to sell their homes for less than what they bought it for due to a Permanent Change of Station.
The government will also inject $10 million into a Veteran Affairs fund that will be used to guarantee loans into terms that are more in favor veteran borrowers.
For current active duty personal serving tours of duty, there will also be an extension of the Servicemembers Civil Relief Act that will prevent lenders from increasing mortgage rates or starting the foreclosure process while a member of the military is in harm's way.
While these specifics are just a part of the White House's overall plan to help struggling homeowners, it's believed there will also be an aggressive effort to reduce refinancing fees on loans backed by the Federal Housing Administration. This change is expected to help 2 million to 3 million underwater borrowers, by lowering monthly payments - saving them thousands of dollars every year.
Additionally, as a result of the recent $25 billion settlement reached between the nation's largest mortgage lenders and state attorneys general on behalf of American homeowners, some of the country's hardest-hit areas in the wake of the housing market collapse will receive additional relief for the hardship they have endured in recent years.