Title XIII of the Dodd-Frank Act, also referred to as the “Pay It Back Act,” introduces changes to the Troubled Asset Relief Program (TARP). These changes include a reduction in the government’s ability to purchase distressed assets from $700 billion to $475 billion. Additionally, Congress is prohibited from creating new programs similar to TARP after June 25, 2010. The Act mandates the use of funds from mortgage-related programs and unused economic stimulus funds to decrease the federal budget deficit. The Secretary of the Treasury is required to provide Congress with biannual reports detailing the amount of money transferred to the general fund. Furthermore, the Federal Housing Finance Agency must present Congress with plans on how to support the housing industry without negatively impacting taxpayers.
The “Pay It Back Act,” also known as Title XIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, amends the Emergency Economic Stabilization Act of 2008 (EESA) by reducing the Secretary of the Treasury’s authority to purchase distressed assets under the Troubled Asset Relief Program (TARP) from $700 billion to $475 billion. Additionally, the Act mandates that the Secretary transfer certain funds to the Treasury’s general fund for the sole purpose of reducing the federal budget deficit and provide Congress with bi-annual reports detailing such transfers. For instance, income received from the sale of securities purchased from Fannie Mae, Freddie Mac, and Federal Home Loan Banks must be transferred to the general fund. The Pay It Back Act’s objective is to balance the government’s goals of stimulating and supporting the economy and housing industry, aiding the federal budget deficit, and preventing substantial tax increases by limiting the government’s spending on purchasing distressed assets and requiring the transfer of certain funds to the Treasury’s general fund.
Dodd-Frank: Title XIII – Pay It Back Act is a section of the Dodd-Frank Wall Street Reform and Consumer Protection Act that focuses on providing relief to homeowners who are struggling with mortgage payments and facing foreclosure.
The Pay It Back Act aims to establish a program that allows eligible homeowners to refinance their mortgages at lower interest rates, thereby reducing their monthly payments and preventing foreclosure.
Eligibility for the Pay It Back Act is determined by various factors, including the homeowner’s financial situation, the value of the property, and the loan-to-value ratio. It is best to consult with a legal professional or mortgage lender to determine eligibility.
To apply for the Pay It Back Act program, homeowners should contact their mortgage lender or servicer to inquire about the application process. They may be required to provide financial documentation and complete an application form.
Yes, the Pay It Back Act can provide assistance to homeowners who are already in foreclosure. It offers options such as loan modifications, short sales, or other alternatives to foreclosure.
No, there are no fees associated with participating in the Pay It Back Act program. Homeowners should be cautious of any individuals or organisations that request payment for assistance related to the program.
The Pay It Back Act program does not provide complete forgiveness of mortgage debt. However, it aims to make mortgage payments more affordable for eligible homeowners by refinancing their loans at lower interest rates.
Participating in the Pay It Back Act program should not directly impact your credit score. However, it is essential to stay current on your mortgage payments and fulfill the program’s requirements to maintain a positive credit history.
Yes, homeowners with second mortgages or home equity loans may still be eligible for the Pay It Back Act program. However, the terms and conditions may vary, and it is advisable to consult with a legal professional or mortgage lender for guidance.
The Pay It Back Act is not a permanent program. It was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act and may have specific expiration dates or eligibility criteria. It is essential to stay updated on any changes or extensions to the program.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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