Job Loss Could Put One in Three Out of Their Home

One in three Americans would be unable to make their mortgage or rent payment beyond one month if they lost their job, according to the results of a national survey taken in mid-September. Despite being more affluent, the poll found that even those with higher annual household incomes indicate they are not guaranteed to make their next housing payment if they lost their source of income. Ten percent of survey respondents earning $100K or more a year say they would immediately miss a payment. The survey was conducted on behalf of a financial consortium comprised of the Certified Financial Planner Board of Standards, Financial Planning Association, Foundation for Financial Planning, and the U.S. Conference of Mayors. Sixty-one percent of those surveyed said if they were handed a pink slip, they would not be able to continue to make their mortgage or rent payment longer than five months. Job loss has become the primary driver of mortgage defaults. With the national unemployment rate holding above 9 percent for five straight months and not expected to drop by any significant measure in the foreseeable future, the state of the labor market is one of the biggest obstacles for struggling homeowners and their lenders. A number of programs at both the national and state level have been launched to assist unemployed homeowners, but so far the expected results haven’t materialized. HUD has told DSNews.com that it does not expect to meet the original goal set for the $1 billion Emergency Homeowners’ Loan Program (EHLP) of subsidizing 30,000 unemployed homeowners’ mortgage payments. The New York Times reports that fewer than 15,000 borrowers are likely to receive EHLP assistance and more than half of the money allotted for the program will go unspent. An analysis of government records by USA Today shows that a separate federal program which provides money to individual states to assist homeowners who’ve lost their jobs has been slow in ramping up. Through the Treasury’s Hardest Hit Fund, 18 states were awarded a total of $7.6 billion to develop their own localized programs to counter unemployment and falling home prices in the fight against foreclosure. USA Today says only about 1 percent of this money has actually been distributed to distressed homeowners, 16 months after the program was launched. The news agency found that as of June 30th, 17 states had used the federal funds to help about 7,500 homeowners. USA Today noted that several states are just now getting their individual programs off the ground and dispersing the money to qualified applicants. The states have until 2017 to use their allotted funds.