(AP) - HUD to offer zero interest loans to homeowners

[joe_momma]

So who were all those saying this is an insane plan?

BN 8:30 *HUD WILL OFFER INTEREST-FREE LOANS TO DISTRESSED HOMEOWNERS
BN 8:30 *HUD ANNOUNCES HELP FOR HOMEOWNERS IN PRESS RELEASE TODAY

Washington (AP) -- The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation's toughest job markets.

The Treasury Department says it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.

Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.

The administration was required to launch the programs by the financial regulatory bill signed by President Barack Obama last month.

http://www.zerohedge.com/article/breaking-news-hud-offer-interest-free-loans-distressed-homeowners


(edit) links

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-176

http://www.cnbc.com/id/38658978

[Phoenix]

I imagine these loans will be permanent indentured servitude, like student loans. No way to get rid of them without paying back every cent.

Much better to just walk away.

[Joe King]

I imagine these loans will be permanent indentured servitude, like student loans. No way to get rid of them without paying back every cent.

Much better to just walk away.


Excuse me, but isn't "paying back every cent" the normal way to "get rid of" all loans? lol

[k-os]

It's a trap!

[MNeagle]

Haven't read the fine print, but I suspect, like other programs; this IS a ARM mortgage. A trap indeed.

Still ticks me off though. Why can't I get a 0% loan???

[mamboni]

So who were all those saying this is an insane plan?

BN 8:30 *HUD WILL OFFER INTEREST-FREE LOANS TO DISTRESSED HOMEOWNERS
BN 8:30 *HUD ANNOUNCES HELP FOR HOMEOWNERS IN PRESS RELEASE TODAY

Washington (AP) -- The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation's toughest job markets.

The Treasury Department says it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.

Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.

The administration was required to launch the programs by the financial regulatory bill signed by President Barack Obama last month.

http://www.zerohedge.com/article/breaking-news-hud-offer-interest-free-loans-distressed-homeowners


(edit) links

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-176

http://www.cnbc.com/id/38658978

Dumb dumb dumb! More good many after bad getting pissed away. These people in Washington are morons; or they are deliberately sabotaging the economy and stringing us all along while they burn Rome.

[StackerKen]

I want a 0% interest loan too.

And I am Unemployed at the moment...Hmmm

I would never do a ARM though....

read link and..edited to add...

Im not 3 months behind on my mortgage but I could be if I tried. ::)

from the link


The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Under the program, eligible 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.

what is a "non-recourse, subordinate loan"? Is that bad?

[Bluegill]

"The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months."

A bridge loan to pay the original loan. The only ones who will ultimately benefit from this are the banks. For they will get at least 24 more payments more or less guaranteed from the Government taxpayers. Then they will foreclose.

Being that it is a secondary loan, it will be last in line for reimbursement from the sheriffs sale. Of course HUD will happily write it off as a loss with out a fight like a commercial bank would.

The banks get the collateral back with a smaller principle, meaning a smaller loss from the eventual bank owned sale.

Kick the can down the road... Nice scam...

[joe_momma]

what is a "non-recourse, subordinate loan"? Is that bad?


As I understand it non-recourse means that if you default and surrender the collateral (the house) the bank cannot come after you for any additional money.

Suppose you borrow $500,000 for a house. You later default, the bank takes the house back and resells it for $400,000 (which is less than the amount borrowed). In a recourse loan, the bank can (and will) demand that you, the borrower, pay the bank the balance due on the loan the remaining $100,000. In effect the borrow is on the hook to repay the entire amount of the loan regardless of the underlying asset.

I believe sub-ordinate load means a second mortgage (common with jumbo loans, where one bank will loan up to the first $480,00 and then a second bank will cover the remainder - these are common in states/areas with high house prices [part of California and Hawaii]) .

[Bluegill]

Yes, a subordinate loan is second loan, and all too frequently third and sometimes fourth loans. Commonly called 80/20 loans, the 20% (usually from a different lender at a higher rate) loan was the down payment for the 80% loan. This eliminated the PMI (private mortgage insurance), something that traditionally was required for a mortgage with less than 20% down. They were common everywhere.

There were also 85/15 and 90/10's.

[ShortJohnSilver]

We all laughed at Peggy Joseph, the moronic black woman who said that Obama was "gonna pay her mortgage" ... yet look at who was right...