The Housing and Urban Development Secretary Shaun Donovan has announced that a new emergency loan program for homeowners is on it’s way. There have been no details announced with the program, but it looks like the White House feels it needs to respond to the poor housing numbers with another program.
The Obama administration plans to set up an emergency loan program for the unemployed and a government mortgage refinancing effort in the next few weeks to help homeowners after home sales dropped in July, Housing and Urban Development Secretary Shaun Donovan said.
“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN’s “State of the Union” program yesterday. “That’s why we are taking additional steps to move forward.”
The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, Donovan said. via Bloomberg
Of course, the housing numbers fell because we are in the hangover from the last “bailout by the Federal Government of housing financing, the new homeowner tax credit. But that was so yesterday.
Instead, let’s belly up to the bar and have another round of taxpayers money to get the housing party started.
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Interesting development. Is this an extension of the "Making Home Affordable" modification program – because I read that they have only used a fraction of the money allocated for it.
Ugh, this is so bad for the market. We are going to continue to prop up the bad loans made by giving money to people who can’t afford to stay in their homes, which further skews the market.
If housing is so important, what about the people who rent and lost their jobs? Are they going to get money as well? No. Because foreclosure numbers are more important for politics. I wish they would just let the market correct itself and simply do what government _should_ be doing in this instance–make sure banks can’t gamble with mortgages without taking any risk.
Unfortunately, the government assistance is artificially boosting the market. It does need to run its own course at some point.
While I’m never the one to pick on someone else’s idea when I don’t have one of my own, at some point we have to let the market correct itself. I agree that something has to get done, but throwing money at the issue will simply put a band-aid on the bullet wound. I have no problem with helping homeowners who are in this common bind, but I believe that they should be forced into going into a financial counseling program as well. A preventative measure such as this might help prevent this from happening so often.
I’ve seen mortgage rates dropping.
That is really good news in this economy.
With the Emergency Homeowner Loan Program, you can receive a zero interest, forgivable bridge loan to pay certain arrearages as well as ongoing monthly assistance to help you to make your monthly first lien mortgage payments. The best part is that if you make your mortgage payments on time, the government forgives 20% of the EHLP loan every year.