More Federal Help for Struggling Homeowners
Ilyce Glink
President Obama announced more help for homeowners struggling with the long-term financial effects of the Great Recession.
With foreclosures rising, with the Federal Reserve talking about how the economy is poised between a (very) moderate recovery and falling off a cliff, and with tens of thousands of Americans each week joining the ranks of "99ers" (those out of work for more than 99 weeks, who no longer qualify for unemployment benefits), it finally occurred to someone to offer more help to unemployed homeowners.
Each week on my radio show, I hear from homeowners who are unemployed and facing more desperate realities. The recovery is nonexistent for them. Jobs that pay anything above minimum wage are hard, if not impossible, to find -- and even minimum wage jobs aren't in abundance.
Mortgages that were made on white-collar salaries or blue-collar overtime pay can't begin to be paid with an
And so millions of folks who are underwater with their mortgages are finding they have to choose between paying the mortgage and putting food on the table or medicine in their cabinet or school books in their kids' lockers.
Against this backdrop, the Obama administration announced that the
Additionally, the
"HUD's new Emergency Homeowner Loan Program will build on Treasury's Hardest Hit initiative by targeting assistance to struggling unemployed homeowners in other hard hit areas to help them avoid preventable foreclosures," said
This new program will complement Treasury's
The program will work through a variety of state and nonprofit entities and will offer a declining balance, deferred payment "bridge loan" (zero percent interest, non-recourse, subordinate loan) for up to
To be eligible, homeowners must be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years. Homeowners must also have a mortgage property that is the principal residence of the borrower; they may not own a second home. Finally, homeowners must be able to demonstrate that they had a good payment record prior to the event that produced the reduction of income.
HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.
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Real Estate - More Federal Help for Struggling Homeowners
(c) 2010 Ilyce Glink, Real Estate Matters