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    Jolie Rouge's Avatar
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    More Money for Struggling Homeowners

    A new federal program is offering aid with a sweet kicker: It doesn't need to be repaid
    by AnnaMaria Andriotis Wednesday, June 29, 2011

    For the roughly four million homeowners who have fallen behind on their mortgage payments, the federal government is offering yet another remedy: free money to catch up on their loans.

    The effort, called the Emergency Homeowners Loan Program, is the latest in the federal government's efforts to slow down the flood of foreclosures a necessary step to a meaningful recovery in the housing market, says a Department of Housing and Urban Development official. For people who have lost their jobs, the $1 billion program offers loans of up to $50,000 that don't actually need to be repaid, if applicants meet certain requirements.

    The goal, says HUD, is to offer short-term aid to people who look like they'll be back on their feet soon. But critics say the loans may leave homeowners worse off in the long run. "This is a short run band-aid, a modest attempt to grapple with the severity of the situation," says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.

    Rolled out by HUD and the nonprofit housing advocacy group NeighborWorks America, the program is making loans with far better terms than anything on offer at a local bank. The loans are interest-free. Payments go directly to the lender for a portion of the borrower's monthly mortgage, including missed payments or past due charges. And when the assistance period -- which runs for up to two years -- ends, 20% of the loan is forgiven with each passing year. In other words, for qualified borrowers who stay in their home for at least five years after the assistance period and who don't fall behind on their mortgage again, this money doesn't have to be paid back.

    But some critics say that's where help for consumers ends. By taking this loan, borrowers risk falling further into debt. If they sell their home before the entire loan is forgiven, they'll be on the hook for the remaining amount. The same holds true if they fall behind on their mortgage payments again: they'll need to repay the remaining balance of the loan when they sell or refinance their home. Separately, borrowers aren't required to have equity in their home to receive this money, so someone who has to repay this loan risks owing more on the home later than they do now. For homeowners who are significantly underwater now, the loan may only delay foreclosure, says Gabriel. While the limit each person will get is up to $50,000, loans will average about $35,000 per person, according to NeighborWorks America.

    Others say the program doesn't go far enough. The loans will be made available to around 30,000 applicants -- "a drop in the bucket," says Stu Feldstein, president at SMR Research, a housing and mortgage research firm. It's helpful, he says, but it won't be enough to seriously boost the ailing housing market. Roughly 4 to 4.5 million borrowers are behind on their mortgages by at least 90 days or are in foreclosure, accounting for roughly 8% of all mortgages. Housing analysts say the loss of income is the primary reason why borrowers are in danger of losing their homes. Those behind the program counter that the help will be significant for some. "If you are one of those 30,000 people, I think you should be very excited to get this help," says a NeighborWorks America spokesman.

    The program started last week and will take applications through July 22. Many experts say it's still too early to say it will be successful, and so far federal assistance programs haven't impacted a significant number of borrowers. The government's Home Affordable Modification Program, which started in 2009 and was projected to help up to 4 million homeowners lower their mortgage payments has so far only permanently helped around 700,000 homeowners.

    To be eligible, homeowners must have lost income and be at risk of foreclosure due to involuntary job loss, underemployment or a medical or other economic condition; details on the application process are available online through NeighborWorks America. http://ehlp.nw.org/

    http://finance.yahoo.com/loans/artic...mod=loans-home

    comments

    How is any one ever able to borrow money and never repay it..This has to be a hoax.The government is not jsut going to give us money to help us with our struggling times and not ask for it to be paid back, yes me and my 91 yr. old father are struggling. But we also know that we cant afford to borrow and Money either..and then lose everything we have in the future.

    ---

    More entitlement money!!! What about the people that are actually paying for this: Do they get any breaks ? So what do I get for consistently paying my mortgage on time?

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    This is totally foolish program.

    The best advice, get out from underneath the underwater property.

    All this program does is give money back to the banks. The fed give you money so you can give it right back to the bank and it was the bank who came in and based the money they lent you on a FALSE APPRAISAL and they KNOWINGLY DID THIS to make quick fees.

    If you are underwater on your house and struggling financially, do a Short sale and get rid of the TOXIC ASSET. This is what businesses do, they file bankruptcy and start another business when business is not good. A person cannot file bankruptcy because you are tagged and no one will allow you to borrow money. But a Short sale, you get rid of the bad asset and you can recover quickly.

    As for the overall market...until all these Toxic Mortgages are cleared up, the Job situation will be in the tank. Once Housing gets back to normal the unemployment rate will drop from 10% to 7%. Back in the 1980's with the RTC it took 750 Billion to clean up that mess. This time around you are talking Trillions...4 Trillion most likely before the mess is cleaned up...and Why???

    Banks, all they cared about was doing loans and running to the Fed and trading the bogus paper in for more cash to loan out again. Fees Fees Fees.

    The more loans they could do, the more Fees and NO REGULATIONS whatsover. None of these fixes work. They are all geared to putting money back into banks pockets.
    You cannot refinance a 7% to a 4.75% loan on an underwater house and the banks are loving this when you are paying that 7% interest.

    The SUCKERS...FAITHFUL MORTGAGE PAYERS who continuously pay their mortgage on a House that will never get paid off or have any value...this is what the banks continue to prey on.

    The only remedy that will work is if the banks Reappraise the houses they lent money on at ACTUAL APPRAISED VALUES even if it means loosing the money they lent on the FALSE APPRAISAL they based when lending the money and also at todays interest rates which is about 4.75%. This would stop the foreclosures and stabilize housing....but again...The banks will not let this happen because they would loose Billions and they are making plenty of money off the FAITHFUL MORTGAGE PAYERS who continuously pay high interest on a house worth 1/2 or 1/3 of it's value..

    The Housing market is going to continue to go down into the toilet because there are no buyers out there who are going to risk buying a property and have it lose money...
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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  3. #2
    Jolie Rouge's Avatar
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    Irony: Gov’t foreclosure settlement checks bounce
    posted at 12:18 pm on April 17, 2013 by Ed Morrissey


    I swear, you just can’t do political satire these days, because reality turns out to be so much more ironic: http://www.huffingtonpost.com/2013/0...?utm_hp_ref=tw

    The foreclosure abuse settlement that was intended to speed relief to homeowners is ending as it began: with controversy and complaints that the program isn’t working.

    On Tuesday, some of the first people to receive payouts under the $9.2 billion deal between federal regulators and the mortgage industry called into a government hotline to report that their bank would not cash their check, the Federal Reserveannounced in a press release. Though the unspecified problem was resolved, the Federal Reserve noted, the episode is likely to further erode confidence in a program that has failed to deliver on almost every promise made by federal regulators. …

    Earlier this month, the Government Accountability Office issued a scathing report on the review process http://www.huffingtonpost.com/2013/0...n_3010360.html finding that regulators did not provide proper oversight and that some errors likely went undetected.

    Regulators also recently released new information suggesting that banks may have made errors in as many as 30 percent of all loans that qualified for a review, a figure far higher than previously reported. http://www.huffingtonpost.com/2013/0...n_3045941.html
    So … government is bankrupt? It’s at least overdrawn.

    http://hotair.com/greenroom/archives...checks-bounce/
    Laissez les bon temps rouler! Going to church doesn't make you a Christian any more than standing in a garage makes you a car.** a 4 day work week & sex slaves ~ I say Tyt for PRESIDENT! Not to be taken internally, literally or seriously ....Suki ebaynni IS THAT BETTER ?

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