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FHA to provide early relief to homeowners

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Saturday, January 23, 2010

MORTGAGE FINANCING

FHA to provide more relief to homeowners

The Federal Housing Administration, facing rising losses associated with its flagship mortgage insurance program, announced Friday an expansion of its efforts to help distressed homeowners avoid foreclosure, saying that borrowers no longer need to miss a mortgage payment to be eligible for assistance.

In the past, borrowers with FHA loans did not qualify for mortgage relief unless they had missed at least two payments. Now borrowers who are at risk of becoming delinquent, or facing "imminent default," will also qualify. Borrowers could have interest rates lowered to reduce payments or have payments suspended for a limited period, according to an FHA statement.

But to be eligible for early relief, homeowners must show they lost a job, had a reduction in income or faced some other life change. This effort is separate from the federal foreclosure relief program, Making Home Affordable, which has struggled to reach many borrowers.

-- Renae Merle

LEGAL

Court stops Swiss transfer of tax files to U.S.

Switzerland cannot hand over files on 26 suspected tax cheats to U.S. authorities because their failure to properly declare assets doesn't constitute fraud under Swiss law, a top Swiss court has ruled.

The ruling released Friday sets limits on Swiss government cooperation with Washington in a U.S. investigation against banking giant UBS and could have implications for the way Switzerland handles 4,424 other Americans suspected of tax evasion.

In the first appeal by former UBS customers against the handover of their banking details to U.S. authorities, the Federal Administrative Tribunal found that one client's failure to fill out a U.S. tax form didn't constitute fraudulent behavior.


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