lenders

This week starts a showdown on mortgage-lending rules. How strong the protections will be for consumers will depend upon how successful lenders are at softening the rules proposed by Congress. Up for grabs are rules for: loan repayment; appraisals; how much skin lenders must have in the game; and suing a lender for fraud or poorly underwritten mortgages.

Most of these rules ultimately will affect the cost of mortgages and the types of mortgages pushed by lenders. One of the key rules that mortgage lenders want to soften is the rule requiring lenders to hold a 5 percent stake in loans that are bundled and sold with other loans. Those bundles are the mortgage-backed securities that imploded and caused the financial disaster.

By requiring lenders to hold a stake, Congress believes that they will be more cautious about their underwriting. When lenders had no skin in the game they were very careless with their underwriting, allowing "liar loans" and other exotic types of mortgages that are now the most likely to default.

For Americans who lost their home to foreclosure, the real estate nightmare may not be over.

In many states -- such as Florida, Illinois, New York, Texas, and Virginia, to name a few -- lenders have the legal right, known as a deficiency judgment, to go after borrowers who owe money on their foreclosed home. The lender can reclaim the losses on the difference between the selling price of the distressed home and the amount owed on the home, also known as a deficiency.

In Virginia, Maryland and Washington D.C., where deficiency judgments are permitted by law, lenders are aggressively seeking to recover monetary losses from foreclosures and short sales, reports The Washington Post.

But what will this mean for foreclosure victims who still don't have the cash to repay their debt?

How's this for a clever energy-saving program: homeowners borrow money for green upgrades such as new windows, water heaters, insulation or roof-top solar panels. The money, loaned by states and municipalities that issue bonds to cover the program, is paid back by homeowners over 15 to 20 years, via a property tax surcharge. It's a win for all: The energy savings cover the homeowner's extra annual tax payment; jobs are created; and the planet gets a break.

What's not to like? Apparently, plenty.

The Wall Street Journal reported recently that the program, called Property Assessed Clean Energy (PACE), is facing resistance from Fannie, Freddie and mortgage providers across the country, who are doing their best to undermine it.

Nonetheless, PACE bonds seem to be gaining traction.

For homeowners struggling to keep up with their mortgage payments, their best hope may be negotiating a lower, more affordable monthly payment while they try to get their financial houses back in order. That's the aim of the government's Home Affordable Modification Program, which encourages lenders to modify loan payments.

It sounds simple: To modify your mortgage, you fill out the paperwork and move forward, right? Don't count on it, say some homeowners who have been there, tried that. Lenders, if they do anything to help you at all, might accept you into the temporary mortgage reduction program, but what happens when you've made those reduced payments and your lender renegs on the deal and forecloses on the home anyway? HAMP officials have been tightening the rules for lenders to make it harder for them to string borrowers along. But in the meantime, many homeowners are fighting back, the American way: by suing and screaming.

More people are taking their lender to court or contacting their congressman, or sometimes both. We looked at some homeowners who have chosen one of these routes -- and won.

Heard of HVCC? It's not a heating and ventilation system for the home (that's HVAC), nor is it an infectious disease. HVCC is the Home Valuation Code of Conduct, a controversial set of guidelines established by Fannie Mae and Freddie Mac in May 2009. By setting up a sort of firewall between lenders and appraisers, in the form of middlemen known as appraisal management companies, they hope to prevent inflated appraisals -- and perhaps another housing bubble.

Mortgage brokers, appraisers and Realtors have been up in arms over the HVCC, but not much has been said about what it means for the average house-hunting consumer or seller. So, in that spirit, here are 10 things you should know before you appraise a home.

Abandoned homes are still a lingering problem for many states as foreclosed homeowners continue to be pushed out in record numbers. When they go, they leave in their wake unkempt yards, dilapidated homes and squatters, all causing unnecessary blight on formerly tidy neighborhoods.

Yet, when these struggling homeowners seek help from their lenders to stave off foreclosure, they often enter a Kafka-esque nightmare of endless faxes, phone calls and paperwork requested by a parade of faceless employees.

It's one thing to give someone the run-around by phone or email. But quite another when they are sitting right in front of you. That's why more and more states are requiring face-to-face mediation before a bank can foreclose on a homeowner.

Minnesota is the latest state hoping to give mediation a try. After a first attempt was vetoed by the Governor, the state legislature will try again this year to get a foreclosure mediation bill enacted into law. it would compel lenders to negotiate with mortgage holders with the goal of eliminating foreclosures.