According to the U.S. Treasury, two billion dollars from the Troubled Assets Relief Program (TARP) will be sent to the seventeen states “hardest hit” by the real estate crisis. The funds are meant to jump-start programs aimed at unemployed homeowners who are having trouble paying their mortgages. The so-called Hardest Hit Fund was established by President Obama this past winter to support sinking homeowners in those areas of the country plagued by the worst housing and job markets, in light of the fact that most foreclosures taking place these days are being executed on middle-class – read: responsible – homeowners who are troubled because of joblessness. The money is drawn from the fifty billion dollars that Congress approved to spend on the Making Homes Affordable program’s mortgage modification section.
In June, the MHA program granted a total of one and a half billion dollars to five states where the mean home price had decreased by twenty percent or more – California, Florida, Michigan, Nevada, and Arizona. August saw five additional states with a high level of unemployment getting an extra six hundred million dollars. These first two sums of cash were intended for any foreclosure-prevention initiatives that the states in question felt would be suited to their individual needs. In contrast, the newest grants can only be used for subsidizing mortgage payments for homeowners who are either unemployed or underemployed. All the original five “hardest-hit” states except Arizona will be receiving the additional funds, which were distributed on the basis if states’ unemployment rate –to- population ratios.
The Department of Housing and Urban Development’s Emergency Mortgage Relief Program is aimed at those homeowners with difficulty paying their mortgages due to involuntary joblessness, underemployment (i.e. – those who have only been able to find part-time work), or medical problems that have kept them away from the workplace. Homeowners must be at least three months behind on their mortgages to apply to receive federal loans to help pay their mortgages for a maximum of two years or fifty thousand dollars. The loans might be able to be forgiven under certain circumstances. HUD announced that certain communities outside of the hardest-hit states may be eligible for funds under the program as well.
The Obama administration has been widely criticized for its abundant spending in the area of foreclosure prevention across the country, with many conservative taxpayers jeering that the government is throwing away money hand over fist on subsidizing the lifestyle of those who a.) don’t want to work, b.) got in over their heads on a mortgage due to stupidity and greed, or c.) aren’t willing to make the same sacrifices as others to stay afloat without help. Yet others have argued that the program isn’t expansive enough, and that there are many areas outside of the “hardest-hit” states that need just as much help, as well as renters plagued by the same issues with affording housing as those that own their own homes. It’s hard to say whether this measure will do any more for the seemingly endless tide of foreclosures than its predecessors in Congress have accomplished, but many people across the country will doubtlessly be keeping their fingers crossed.
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