With previous efforts to aid homeowners who are facing foreclosure or whose home values are “underwater” making only a slight dent in foreclosure projections, Congress has passed carrot-and-stick legislation called the Helping Families Save Their Homes Act to encourage both homeowners and lenders to take advantage of government mortgage programs. What has changed in this new bill since the U.S. Treasury announced its foreclosure prevention plan in March is that lender participation in government plans is now required as long as consumers meet eligibility requirements. In addition, some administrative burdens have been removed, borrowers are no longer required to produce tax returns for income verification and FHA premiums on modified loans can potentially be lower.

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