$ 3 billion will be given by the Obama administration to help anyone getting foreclosed who is unemployed. The Hardest Hit Fund would going to be doubled with an additional $ 2 billion was announced last week to be put to the fund. $ 1 billion was given to a program to help unemployed borrowers who have delinquencies on their mortgages called Housing and Urban Development. Experts are really just worried that banks instead of homeowners will benefit more from this.
Seems like a money put with preventing foreclosures
The Hardest Hit Fund was began to help states make their own foreclosure prevention programs in February, helping those with unemployed foreclosures. The Wall Street Journal reports the fund is currently financing initiatives in 10 states. $ 50 billion total is within the program for housing aid under the Troubled Asset Relief Program, which is where it comes from. 17 states can be able to take advantage of the $ 2 billion, such as the District of Columbia, that have unemployment rates super high. One who’s eligible may receive up to $ 50,000 for mortgage payments for two years as a loan with no interest from the HUD, which is why they get $ 1 billion.
Hardest Hit Fund receiving little money comparatively
The economic recovery is going down because of the housing market, which historically has helped all the recessions. Hardly anyone can refinance or buy although interest rates are at record lows, reports the New York Times. It is hard to sell homes for many who are unemployed homeowners. The housing market gets worse with foreclosures make neighborhood values go down. The Hardest Hit Fund will help 140,000 borrowers if it actually works right. With the new money, both the Hardest Hit and HUD programs could eventually help about 400,000 borrowers — a drop within the bucket set against 14.6 million unemployed and three million unemployed borrowers contemplating foreclosure.
Gravy train for mortgage lenders
Banks, not unemployed homeowners, will benefit more from Obama’s unemployed foreclosure funding, some experts believe. Banks should be hurting along with unemployed borrowers says David Abromowitz who is the senior fellow at the Center for American Progress and had an interview with The Hill. He really feels that mortgage lenders should be making principal reductions on loans and other modifications, although they don’t have to do that. Abromowitz suggested that lenders should be required to make concessions and possibly even match funding. Dean Baker of the Center for Economic and Policy Research told The Hill that with so many people with underwater mortgages, the new funding is unlikely to do much good. Dean said for the programs to work there has to be a reasonable expectation that homeowners can have some equity in their property at the end or they’ll lose their homes anyway.
Additional reading at these websites
Wall Street Journal
online.wsj.com/article/SB10001424052748704901104575423493999575302.html
New York Times
nytimes.com/2010/08/12/business/12treasury.html
The Hill
thehill.com/blogs/on-the-money/banking-financial-institutions/114349-banks-to-benefit-most-from-white-house-program-to-stave-off-foreclosures
