President Obama signed housing legislation this week to revamp a government foreclosure prevention program and bolster prosecution of mortgage fraud. The provision that would allow bankruptcy judges to modify loans had been stripped from the bill after complaints from the mortgage industry. Instead the bill focuses on significant changes to the government program that allows delinquent borrowers to refinance.
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The legislation also includes protections for renters displaced when their landlords fall into foreclosure. Renters' leases would be honored or they will get at least 90 days notice. The Justice Department also gains expanded authority to prosecute mortgage fraud, including fraud by mortgage brokers and others not directly regulated by federal officials.