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Foreclosure experts at USHUD.com and Heavy Hammer Inc. say the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which went into effect this week, is slashing into an already beleaguered real estate market.

Michael Urbanski, CEO of USHUD.com and Heavy Hammer Inc., says credit card companies, in anticipation of this law becoming effective, have taken dramatically harsh steps over the past nine months. Skyrocketed interest rates, newly created fees and chopped credit lines are reducing millions of American consumers’ ability to obtain a mortgage. Without mortgage-eligible buyers, there is little chance for a recovery from the housing market crisis.

“As well intended as the CARD Act may have been, it is proving to be yet another nail in the coffin for the housing industry,” Urbanski said. “When an interest payment increases from eight to 16 percent, the minimum monthly payment is effectively doubled for the card holder with devastating consequences for future mortgage eligibility.”

Minimum monthly credit card payments are weighed with increasing importance by lenders. Indiscriminately increasing these payments further erodes the home buying and refinancing population, drastically reducing the possibilities of a housing recovery, Urbanski said.

President Obama signed the CARD Act into law last May to deliver protections long sought by consumer advocates, but the law did not go into effect until Monday. While certain rules were clarified by the Federal Reserve, credit card companies used the delay to minimize losses at their customers’ expense, Urbanski said. Critics of the legislation correctly forecasted increasing rates, fees and other measures by lenders in advance of Monday’s deadline.

SOURCE Heavy Hammer Inc.