Program to aid unemployed homeowners provides little relief

Los Angeles Times ^ | 3/2/2012 | E. Scott Reckard and Alejandro Lazo

[blueplum]

Only a fraction of the $7.6-billion federal Hardest Hit Fund has been paid out to needy borrowers. California has provided homeowners less than 2% of the federal funds it received, as of last year.

A $7.6-billion federal program to help unemployed homeowners stave off foreclosure has provided little relief two years after being unveiled, with less than $218 million of the money paid out to needy borrowers as of Jan. 1.

California, which was allocated nearly $2 billion from the Hardest Hit Fund, provided less than $38.6 million in assistance for 4,357 borrowers by the end of last year, according to the state's latest report to the Treasury Department.

-snip-

California, Nevada and Arizona jointly devised a plan to provide mortgage relief funds to struggling borrowers only if banks and loan investors agreed to reduce the principal owed on the loan by a matching amount. For instance, a $25,000 principal reduction from the lender would be doubled, producing a $50,000 benefit to the borrower.

State officials say banks, loan investors and the government-owned mortgage giants Fannie Mae and Freddie Mac declined to go along with the plan.

-snip -

Edward DeMarco, head of the independent federal agency that oversees Fannie Mae and Freddie Mac, has contended that reducing principal on mortgages owned or guaranteed by Fannie and Freddie was not consistent with his responsibility to protect taxpayers.

[blueplum]

two-page article at link

[FreedomPoster]

Sounds like a success story to me. Now shut the program down at great savings to the taxpayer.

[momincombatboots]

Surely you don’t mean Kalifornia kept 98 percent of the federal funds intended to help folks avoid destitution. By Kalifornia I mean SoCal. I love the Crescent city area.

[Iron Munro]

Programs like this are nothing but thinly disguised wealth redistribution scams.

They use the money to expand a bureaucracy or create a new one, and to fill new busy-work jobs with loyal democrats.

The bureaucrats shuffle paper until the money runs out and then scream for more.

If a politician is brave enough to try to reduce or eliminate funding they are portrayed in the media as a greedy, mean spirited, ultra-right winger who hates babies, sick people and minorities.

[EVO X]

California, Nevada and Arizona jointly devised a plan to provide mortgage relief funds to struggling borrowers only if banks and loan investors agreed to reduce the principal owed on the loan by a matching amount. For instance, a $25,000 principal reduction from the lender would be doubled, producing a $50,000 benefit to the borrower.

In the hardest hit housing markets, the problem is a little bigger than a $50K principal reduction. Stockton, Ca peaked out somewhere around $360K and home values are now $120K. There are communities all over the country where people are underwater by hundreds of thousands of dollars and many of the numbers are worse than Stockton.

It would be nice if the Feds had a program I could tap if I where to come up short for my next rent payment /s

[raybbr]

I have not been able to find an answer to this: Will the people who received our tax money as a “benefit” be taxed on that amount as income when they file next year?

[LibLieSlayer]

NOTHING that obama has done has helped anyone but the muslims, marxists and himself and his party.

LLS

[nhwingut]

So typical. Leftist get hold of millions in fed money to help the folks. They keep it for themselves and use it to fund other (leftwing) causes down the road.

Big surprise.

[blueplum]

not so long ago Moonbeam was screaming for a Kalifornia bailout - then all was silent - I guess we got it after all. The interest on those funds must be quite a sum.