President Obama Announces New Steps to Provide Housing Relief to Veterans and Service Members

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In his recent State of the Union address, President Obama laid out a Blueprint for an America Built to Last, calling for action to help responsible borrowers and support a housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference.

This week, the President is announcing two steps the Administration is taking to support homeowners and their families - providing relief for service members and veterans, including those wrongfully foreclosed upon or denied a lower interest rate on their mortgages, and reducing fees for 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 service members and veterans.

Under the agreement, they will:

• Conduct a review of every service member 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 service member's money lost because they were wrongfully denied the opportunity to reduce their mortgage payments through lower interest rates;

• Provide relief for service members 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 Service member Civil Relief Act to service members serving in harm's way.

As part of the President's aggressive effort to reduce barriers and costs for refinancing, the Administration is also announcing that the FHA will cut its fees for refinancing loans already insured by the FHA. An estimated 2-3 million borrowers could be eligible for this savings, providing the typical FHA borrower with the opportunity to save about a thousand dollars a year through refinancing than they could have under today's fee structure.