Americans struggling to pay up the debts have made them realize that a lot more still needs to be done in this respect. Over a million people are expected to benefit from this act. It will help people to hold on to their homes and avoid such problems in the near future. 

The legislation proposed, attempts to increase the funds available for holding a pre-foreclosure counseling process by 200 million dollars. This will help another half a million families to talk with the appropriate counselors and explore some more options available. 

The existing Bankruptcy Code gives the judge the power to modify only those mortgages on family farms and vacation homes. Primary residence is beyond this scope. Modifications concerning primary residence will be allowed only for those who satisfy strict income expense criteria. However, this act attempts to change these norms of Bankruptcy Code, by removing the prohibition imposed on modifying the mortgages. Estimated 600,000 families will be benefited. 

The cap on the bonds of Housing Finance Agencies would be raised to $10 billion. The proceeds obtained from these bonds will then be use to refinance those who applied for subprime loans, helping those who are buying houses for the first time with complicated mortgage schemes and also give money for multifamily renting. This is hoped to open up more jobs, produce more revenues as well as encourage consumer spending.  

Community Development Block Grant funds will be accessible to those communities, who have suffered the maximum in the hands of foreclosure activities. Foreclosed homes, which have yet remained unsold, can be bought by them. Funds will also be given for rehabbing the homes and then resell it or rent it out. 

The changes are also expected to modify the Truth-in-lending Act. It would be mandatory on the part of the firms, to be transparent and explain the complete terms of the mortgage loan to the homebuyers, both when applying and when refinancing. Terms should be disclosed within three days of loan application and 7 days before closure. The maximum payment that the loan requires would also be informed to the borrower within these time limits. If this rule is not adhered to, $2000 to $5000 would be charged per violation.  

Senator Reid however, did not disclose how long it would take this legislation to be put into effect. It has to be approved by both the Houses and then signed by the President. Only then the funding will be approved.