Twisted Titan
12th August 2010, 08:57 AM
HUD Offers Interest-Free Loans to Reduce Forclosures
The Obama administration will offer $1 billion in zero-interest loans to help homeowners who’ve lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas.
The Department of Housing and Urban Development plans to make loans of as much as $50,000 for borrowers “in hard hit local areas†to make mortgage, tax and insurance payments for as long as two years, according to a statement released today. The Treasury Department will also provide as much as $2 billion in aid under an existing program for 17 states and the District of Columbia, according to the statement.
The initiatives will help “a broad group of struggling borrowers across the country and in doing so further contribute to the administration’s efforts to stabilize housing markets and communities,†Bill Apgar, HUD’s senior adviser for mortgage finance, said in the statement.
The new loan program, funded under the Wall Street overhaul President Barack Obama signed into law last month, is part of a broader effort to aid unemployed homeowners in the wake of the worst economic crisis since the Great Depression. The $2 billion in Treasury aid announced today doubles the amount already sent to housing agencies in states with unemployment rates at or above the national average during the past 12 months.
The U.S. unemployment rate probably will average 9.6 percent in 2010, based on the median estimate of 74 economists in a Bloomberg poll. That would be the highest annual rate since 1983.
Accelerating Foreclosures
The joblessness is helping accelerate foreclosures. A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California-based data company said in a July 15 report.
“The housing sector continues to be a huge drag on the economy,†said Ted Gayer, an economist at the Washington-based Brookings Institution. “We still have excess inventory -- all the government programs we’ve had haven’t prevented that.â€
HUD’s Emergency Homeowners Loan Program aims to help people who have experienced a “substantial reduction†in income because of involuntary unemployment, underemployment or a medical condition, according to the statement.
Aid recipients must be at least three months delinquent on loans and have “a reasonable likelihood†of being able to resume payments and other housing expenses within two years, HUD said. Borrowers must live in the home and demonstrate a good payment history prior to their loss of income.
“A program of this size is not going to make a large difference, but it’s a bridge,†said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. “We need the housing market to stabilize, because the better the housing market is the stronger the economic recovery is going to be.â€
http://www.bloomberg.com/news/2010-0...reclosure.html
The Obama administration will offer $1 billion in zero-interest loans to help homeowners who’ve lost income avoid foreclosure as part of $3 billion in additional aid targeting economically distressed areas.
The Department of Housing and Urban Development plans to make loans of as much as $50,000 for borrowers “in hard hit local areas†to make mortgage, tax and insurance payments for as long as two years, according to a statement released today. The Treasury Department will also provide as much as $2 billion in aid under an existing program for 17 states and the District of Columbia, according to the statement.
The initiatives will help “a broad group of struggling borrowers across the country and in doing so further contribute to the administration’s efforts to stabilize housing markets and communities,†Bill Apgar, HUD’s senior adviser for mortgage finance, said in the statement.
The new loan program, funded under the Wall Street overhaul President Barack Obama signed into law last month, is part of a broader effort to aid unemployed homeowners in the wake of the worst economic crisis since the Great Depression. The $2 billion in Treasury aid announced today doubles the amount already sent to housing agencies in states with unemployment rates at or above the national average during the past 12 months.
The U.S. unemployment rate probably will average 9.6 percent in 2010, based on the median estimate of 74 economists in a Bloomberg poll. That would be the highest annual rate since 1983.
Accelerating Foreclosures
The joblessness is helping accelerate foreclosures. A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California-based data company said in a July 15 report.
“The housing sector continues to be a huge drag on the economy,†said Ted Gayer, an economist at the Washington-based Brookings Institution. “We still have excess inventory -- all the government programs we’ve had haven’t prevented that.â€
HUD’s Emergency Homeowners Loan Program aims to help people who have experienced a “substantial reduction†in income because of involuntary unemployment, underemployment or a medical condition, according to the statement.
Aid recipients must be at least three months delinquent on loans and have “a reasonable likelihood†of being able to resume payments and other housing expenses within two years, HUD said. Borrowers must live in the home and demonstrate a good payment history prior to their loss of income.
“A program of this size is not going to make a large difference, but it’s a bridge,†said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. “We need the housing market to stabilize, because the better the housing market is the stronger the economic recovery is going to be.â€
http://www.bloomberg.com/news/2010-0...reclosure.html