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Vote for Me and I Will Pay Your Mortgage With Other People’s Money

August 15, 2010

Obama: If You are a Deadbeat But Likely to Vote for Me, I Will Pay Your Mortgage with Money from Other Taxpayers
The Obama Administration today announced two programs providing additional support to help homeowners who haven’t paid their mortgage. In one program funds will be provided for those who are delinquent by at least three months. So if you are delinquent by two months, forget about dropping a check in the mail. Sit back and wait, it’s possible you may have one the Obama lottery.

Under the first program announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

States that have already benefited from previously announced assistance under the Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program. States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established guidelines, meet the distinct needs of their state.

The states eligible to receive funds through this additional assistance, along with allocations based on their population sizes, are as follows:

Alabama $60,672,471

California $476,257,070

Florida $238,864,755

Georgia $126,650,987

Illinois $166,352,726

Indiana $82,762,859

Kentucky $55,588,050

Michigan $128,461,559

Mississippi $38,036,950

Nevada $34,056,581

New Jersey $112,200,638

North Carolina $120,874,221

Ohio $148,728,864

Oregon $49,294,215

Rhode Island $13,570,770

South Carolina $58,772,347

Tennessee $81,128,260

Washington, DC $7,726,678

Approximate Total: 1.57 billion in bailouts

The second program, The HUD Emergency Homeowners Loan Program, which is part of the Dodd-Frank Bill, will complement Treasury’s Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states. Those areas are still being determined.

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:

1) 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;

2) Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;

3) Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks

Posted by Robert Wenzel

www.economicpolicyjournal.com

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