FHA to provide early relief to homeowners

Saturday, January 23, 2010; A08

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.

Evidence of such behavior is necessary under Swiss law, and a 1996 treaty with the United States, for Switzerland to lift its strict banking secrecy rules and provide information on foreign clients to other governments.

The Internal Revenue Service said Friday that it expects the Swiss to honor the agreement.

It is unclear how the ruling, which cannot be appealed, will affect the remaining files awaiting transfer to U.S. authorities.

-- Associated Press

ALSO IN BUSINESS

-- Private-sector union membership shrinks: Local, state and federal government workers make up 51.5 percent of all union members -- becoming the majority of organized labor for the first time, the Bureau of Labor Statistics reported.

-- Five U.S. banks fail: Regulators shut down banks in Florida, Missouri, New Mexico, Oregon and Washington, bringing to nine the number of bank failures in 2010, following 140 closures last year.

The Federal Deposit Insurance Corp. took over Charter Bank, based in Santa Fe, N.M.; Miami-based Premier American Bank; Bank of Leeton in Leeton, Mo.; Columbia River Bank, based in the Dalles, Ore.; and Seattle-based Evergreen Bank. The closures will cost the FDIC's insurance fund an estimated $531.7 million.

-- News services

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