President Obama signs two important Acts

President Obama signed into law the Helping Families Save Their Homes Act, and the Fraud Enforcement and Recovery Act (FERA), on May 20. The Helping Families Save Their Homes Act is aimed at helping homeowners by making mortgages more affordable and preventing "avoidable" foreclosures. As many as 9 million homeowners could benefit from this legislation. Obama, before signing the bill, said the bill "expands the reach of our existing housing plan for homeowners with FHA or USDA rural housing loans, providing them with new opportunities to modify or refinance their mortgages to more affordable levels." The original bill was criticized for the "cram down" provision, which according to critics would encourage borrowers to abdicate their responsibility towards loan repayment. The legislation, however, was ultimately passed without the cram down provision. FERA is a bid to revamp the outdated and ineffective laws governing mortgage fraud. The number of investigations pertaining to mortgage fraud, initiated by the Federal Bureau of Investigation (FBI), has doubled over the past three years. The legislation, in addition to providing $331 million to agencies such as the FBI and the Securities and Exchange Commission, expands the authority of the Department of Justice "to prosecute fraud that takes place in many of the private institutions not covered under current federal bank fraud criminal statutes," according to President Obama.