Congress May Add to Relief For U.S. Military Personnel
With 200,000 troops massed on the Iraqi border, lawmakers in Congress are looking for ways to express their support for servicemen and women, and one possibility is lowering the interest rates on their mortgages.
Under the Soldiers' and Sailors' Civil Relief Act, all mortgage lenders are required to reduce mortgage interest rates to 6% for active duty reservists and guardsmen during times of war.
But with current mortgages at 6% or below, SSCRA is not providing much relief.
So Sen. Wayne Allard, R-Colo., asked Department of Housing and Urban Development secretary Mel Martinez for any suggestions at a recent Senate Banking Committee hearing.
With current mortgage rates at 6%, "it would now be appropriate to have something lower than that," secretary Martinez said. The HUD secretary promised to confer with Defense Department officials about any changes and to work with the committee to provide meaningful relief under the SSCRA.
"So I would welcome any suggestions by the committee on how we might work together," the secretary said.
In other legislative news, Rep. Robert Andrews, D-N.J. has introduced a bill that would give consumers recourse if servicers fail to make timely payments from escrow accounts for homeowners insurance and taxes.
A real estate attorney, Rep. Andrews said he has received complaints from constituents who have received notices of policy cancellations because the servicer is not paying the premiums on time.
"The holder of the escrow has a fiduciary duty to the mortgagee to make these payments promptly and not cut it so close," he said.
His bill (H.R. 650) would allow consumers to sue servicers for treble damages. Rep. Andrews introduced the same bill last year.
The bill would have to pass both the House and Senate to become law.
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