Monday, October 3, 2011

Jobless Housing Aid Expected to Fall Short of Goal

A $1 billion federal program to help the jobless and medically ill avoid foreclosure by offering temporary mortgage assistance had too many stringent rules that made too many home owners ineligible to participate, housing counselors say. The Emergency Homeowners’ Loan Program, which wrapped up approving applications last Friday, is expected to only have spent half its allocated funds. The Housing Department says it expects about 10,000 to 15,000 people will have qualified — a small fraction of the about 100,000 who even applied. "The [HUD] guidelines were so restrictive that it knocked out a lot of otherwise eligible and worthy consumers," Lemar Wooley, a HUD spokesman, told CNNMoney. In the program, the government offered interest-free, forgivable loans to home owners who lost at least 15 percent of their income due to unemployment or a medical condition. Qualified home owners were eligible to receive up to $50,000 or 24 months of mortgage assistance. The program launched in late June, after several delays, and gave home owners six weeks to apply. The deadline was later extended to mid-September to give home owners more time. However, income and delinquency guideline barriers prevented many home owners from receiving assistance, housing counselors told CNNMoney. Also, some home owners were turned away because they were too far behind on their payments and some had lost their jobs more than a year ago. (HUD’s rules required delinquency to have occurred within the past 12 months.) Source: “Mortgage Help for Unemployed Disappears,” CNNMoney (Oct. 3, 2011)

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