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Obama NewsMortgage Help
Our previous article gave a summary of the new Emergency Homeowner Loan Program; this article will provide more details on this long-awaited and exciting new scheme for unemployed workers struggling with their mortgages. The scheme is funded by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Funds already allotted for the program amount to $1 billion, which analysts from the Department of Housing and Urban Development estimate will suffice to provide assistance to around 30,000 struggling homeowners with loans averaging $35,000.
The Loans
The loans provided by the Emergency Homeowner Loan Program will work as as bridge loans to struggling homeowners to help them pay delinquent taxes, arrearages and insurance payments and up to 24 months of mortgage payments, interest and mortgage insurance premiums, as well as taxes and hazard insurance. This program is especially designed to help unemployed workers in states not covered by the Hardest Hit Housing Markets program. The scheme is set to start soon, as soon at is approved by the Senate. Already it is well overdue. It was set to start at the end of 2010 and was only approved by the House of Representatives in March 2011. The states that will benefit from the program include Puerto RIco and 32 other states. Of the 32 states 27 will benefit directly from the scheme and 5 will manage their own versions of the program.
Management
The Department of Housing and Urban Development will delegate the management of the scheme to non-profit local community agencies and to state housing finance agencies (HFAs), who in most cases already manage similar programs to help struggling homeowners. However, the Department of Housing and Urban Development will still retain monitoring and note management functions over the scheme.
Funds
The funds allocated to the program will be divided among participating states based on their share of unemployed homeowners with a mortgage. California, Florida, Illinois, Ohio, Michigan, Georgia and New Jersey will get the lion’s share of the funds. California is the state that will receive more funds: $476.2 million. Double the amount the second state in the list, Florida, will receive—$238.8 million. Indiana, Tennessee, Alabama, South Carolina, Kentucky, Oregon, Mississippi, Nevada, Rhode Island and Washington DC will all receive less than $100 million. Rhode Island and Washington will only receive $13 million and $7.7 million respectively.
The program cannot come soon enough for unemployed workers who see their chances of saving their homes evaporate with every week of unemployment. Thousands of unemployed workers with mortgages rely on this program passing through the Senate to allow them to restructure their mortgage payments and save their home from foreclosure. Who will qualify for this program? We will discuss that in our third and last article of this series on the Emergency Homeowner Loan Program.
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