Unemployed Homeowners Might Receive Assistance

Advocacy groups are meeting with officials from Housing and Urban Development, the Treasury Department and the White House Economic Council.  These groups hope officials will take part in an existing $75 billion program to help homeowners modify mortgages and implement a program that would help the jobless stay in their homes. Spearheading this program is John Dodds, Director of the Philadelphia Unemployment Project.

The program would go beyond a measure included in bank reform legislation and would use $3 billion in bank bailout dollars to give to the nations jobless fixed rate low interest loans. Unemployment numbers are expected to remain at or above 10%  for most of 2010 and likely beyond.

The existing foreclosure prevention programs are only expected to deflect a small number of the millions of foreclosures predicted to take place over the next four years.  This program would give recession-driven unemployed homeowners a loan fixed at 31% of the family’s overall income for 2 to 3 years, or until the primary wage earner retains permanent employment.  Loan servicers and lenders would receive payments from the $75 billion bailout fund that is allocated for homeowner assistance, this will aide in recovery of losses to the bank.  Lenders and servicers would be required to modify the loan payment to a lower more affordable rate in order to receive the assistance funds.

The foreclosure crisis is still a threat to the nations economy.  This program would work in conjunction with the Making Home Affordable Program.  John Dodds in a statement to the Judiciary Committee said, “We think there is a clear need for the Treasury to do something about the second wave of foreclosures coming soon, adding, this program would help stabilize the housing market and would help with the recovery. We’ve been led out of the previous half-dozen recessions because the housing market recovered”.

Related posts:

1. Democrats Say Lenders Are Falling Short
2. Lenders Resist Making Home Affordable
3. Report: HAMP Program Only Making A Dent In Foreclosure Crisis
4. Foreclosure Prevention Program, Fixer Upper Or Turn Key Ready?
5. Qualifying For The New Foreclosure Relief Program

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