Hillary Clinton's 1 Billion Dollar Plan

[Moe Bedard]

Senator Hillary Clinton has been jumping on the save the American people from unscrupolous lenders and brokers band wagon lately.

The Senator will also seek the establishment of a $1 billion fund to help the states help borrowers who are in danger of foreclosure. There are different types of programs that the states have available. Some have programs that will help the homeowner make a single payment to bring them up to date and some have programs that will help re negotiate the loans and some provide financial counseling.

She also laid out an 8 point plan to help curtail mortgage abuse.

Making it a requirement that mortgage broker disclose the fact that they make higher fees if the mortgages they arrange have higher interest rates. It is not in their best interest to get you the lowest rate.

Requiring that mortgage brokers be registered with the Federal Government and that the states and the federal government work together to develop stricter and stronger licensing regulations aimed to stop brokers from steering people to high cost mortgages that they cannot afford, thereby leading to more foreclosures. The national registry will enable the public to look up a broker's history to see if there have been any violations or complaints.

She would also eliminate the prepayment penalties that prevent a borrower, especially one who has a variable rate or other unconventional mortgage, from paying it off when the rates are low. These types of mortgages that lock people in and have large balloon payments tagged onto the end, are responsible for more than half of the foreclosures nation wide.

Make it a requirement that all the costs including taxes, be included in the estimate of monthly costs that the mortgage broker gives to the borrower.

This is great news. We will see how long it takes to get this money to the people who truly need it. I'll be following this big time!