Obama to help unemployed homeowners
Wednesday, August 11, 2010 at 2:36 pm
- 4 Comments
Today, the Obama administration announced it will spend $3 billion more to help jobless homeowners.
First, the Department of Housing and Urban Development is starting up the Emergency Homeowners Loan Program, created in the Wall Street reform bill. The program helps the unemployed pay their mortgages by providing interest-free loans of up to $50,000. Borrowers can use the funds to pay their “mortgage principal, interest, mortgage insurance, taxes and hazard insurance” for up to two years or until they find work.
To qualify, homeowners need to be at least three months behind on their mortgage payments, demonstrate the ability to resume payments within two years, live in their home, own only one home and have a good history of paying bills. HUD did not say which states or cities it will offer the program in.
Second, the Treasury Department is expanding its Hardest Hit Fund, which provides direct mortgage aid to the jobless in states with high unemployment rates. The fund is already working in Arizona, California, Florida, Michigan, Nevada, North Carolina, Ohio, Oregon, Rhode Island and South Carolina. Now, homeowners in Alabama, Illinois, Kentucky, Mississippi and New Jersey are also eligible.
These programs are all well and good. But as I wrote in June, for millions of homeowners, they might be too little, too late. The foreclosure crisis has already peaked. And neither program addresses the underlying problems of unemployment and homeowners being underwater on their mortgages since the collapse of the housing bubble.
“We remain committed to helping struggling homeowners, and this program will provide additional assistance to states hit hardest by unemployment,” Assistant Secretary for Financial Stability Herb Allison said in a statement. “This is part of the Administration’s comprehensive housing policy that has helped to stabilize a fragile housing market and allows responsible homeowners the chance to reduce their monthly mortgage payments to affordable levels.”
4 Comments
Comment posted August 11, 2010 @ 10:43 pm
What about us in ?Minnesota? Just as the 99ers were left out and left to starve, Government today picks and chooses who survives, who falls and who is made whole. (Wallstreet was made whole the rest of us~~~~left to fend for ourselves).
How about a real jobs prgram and while your at it, inact protectionism. Bring back our jobs lost during the Bush years. The we can all pull ourselves up by our own bootstraps!
Comment posted August 29, 2010 @ 9:27 am
HUD will get funds that they will keep and not help anyone. We went through the entire program and were denied any assistance. They kept changing what qualifications were needed to meet their program guideline to receive help. We met all of them. They sent us to a financial counselor, (who told us our problem was we weren’t bringing in enough money) okay..I did learn to add and subtract in elementary school. So…will this new program really help anyone or will the State’s government programs just keep the money within their departments for their own use like they have in the past. We eventually had our mortgage payments lowered by the bank (not much $40). Again, we are behind. The banks aren’t helping either. We have equity in our home but if we can’t sell our home it doesn’t matter how much equity a homeowner has left in their home.
Comment posted October 13, 2010 @ 9:46 pm
Sally, the homeowners original deposit and home equity left in their home SHOULD BE MADE AVAILABLE to the homeowner. The original deposit should be available to convert the home to a “rent situation” so the homeowner can stay in the home until a percentage of the original deposit is exhausted.
And it is crazy that built up home equity is denied to those who are out of work. If a home is worth $200,000, the banks may subtract 1/3 of that value and make the equity cap at $133,000. In theory, even if a homeowner had paid off their home but needed to tap a home equity line of credit because they were out of work, the bank could realistically make $133,000 available to the home owner WITHOUT risking losing money on the home. The banks could also cap how much was taken out each month to ensure the homeowner just doesn’t skip town.
By not allowing the unemployed homeowner access to built up home equity, the bank is ensuring the homeowner will lose their home faster and lose their built up equity as well if they don’t sell quickly, yet if they sell quickly they probably lose a lot anyways.
And only allowing people to be eligible by getting behind on their payments is lunacy as it begins a process called “parallel foreclosure”.
http://www.parallelforeclosure.com
Comment posted November 9, 2010 @ 11:41 pm
And forcing unemployed homeowners to be 3 months behind before they can apply for this program, which allows http://www.parallelforeclosure.com to kick in, is a VIOLATION OF THE FEDERAL HOBBS ACT, the extortion clause.
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