Dennis Norman
The U.S. Department of the Treasury has announced yet another new plan to help homeowners avoid foreclosure. This plan targets homeowners that are struggling with unemployment and offers two foreclosure-prevention programs to help them.
The first program will be through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund). Through this program the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners struggling to make their mortgage payments due to unemployment.
The second program will be a new Emergency Homeowners’ Loan Program through the U.S. Department of Housing and Urban Development (HUD). There will be $1 billion pumped into this program to provide assistance – for up to 24 months – to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.
The HUD program will be available through state and non-profit entities and will offer a zero-interest, non-recourse, subordinate loan for up to $50,000 to assist borrowers with mortgage payments for up to 24 months. To be eligible for this program borrowers 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;
- Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
- Demonstrate a good payment record prior to the event that produced the reduction of income.
HUD says there will be more information on the emergency loan program in the next couple of weeks.
So there you have it…the answer is to borrower your way out of trouble.…just like the government. (oops, Editorial comment ;)
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