and America takes another one in the........
Posted on 08/14/2010 8:10:14 PM PDT by SeekAndFind
Call it a hair-of-the-dog solution to a seemingly intractable problem. The Department of Housing and Urban Development have begun issuing emergency $50,000 loans at zero interest to unemployed homeowners in an attempt to stall foreclosures, using $1 billion of Porkulus funds for the effort and $2 billion from the same source for indirect aid through state governments. Ironically, while foreclosure seizures are rising, the actual trend is more optimistic:
The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation’s toughest job markets.
The Treasury Department says it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.
Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.
The news comes as foreclosure seizures have increased by 6% over last year:
The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments.
Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.
Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis.
Also, the cancer appears to have spread to areas outside of the original epicenters of the collapse:
Home foreclosures are climbing in the Northwest and Midwest, areas that had earlier dodged the worst of the mortgage crisis, according to real estate data firm RealtyTrac Inc. With 14.6 million Americans out of work and consumer spending declining, further weakness in housing could push the economy back into recession, former Federal Reserve Chairman Alan Greenspan said Aug. 1.
Foreclosure rates in Utah, Idaho, Illinois and Colorado rose in the second quarter compared with a year earlier, and rank among the 10 highest in the country. The number of homes seized by lenders at least doubled in 19 states and more than tripled in seven of them, according to Irvine, California-based RealtyTrac.
That’s the bad news, and it’s legitimately bad. The Obama administration has failed to do anything more than to extend the cycle of foreclosures, which merely postponed the inevitable for lenders faced with unsalvageable situations. However, it masks better news, which is that the actual failure rate is finally declining as the worst cases finally get cleared off the ledgers:
The number of properties receiving an initial default notice — the first step in the foreclosure process — rose 1 percent last month from June, but tumbled 28 percent versus July last year, RealtyTrac said.
Initial defaults have fallen on an annual basis the past six months.
In other words, the market has begun to find its equilibrium, a process in which the Obama administration has interfered for the last eighteen months in a vain attempt to make some political hay while the sun not only didn’t shine, but the skies poured. The use of a billion dollars to float homeowners over the next two years is hardly the most damaging intervention concocted yet by the administration, but it’s not going to do much without a big change in employment to match it. The real problem, as just about every one of these news reports acknowledge, is the lack of jobs for American workers.
To fix the foreclosure crisis, the Obama administration has to abandon its top-down, command-economy policies and eliminate the uncertainties that its massive expansion of the regulatory state and of the national debt has created. Otherwise, the interest-free loans will also mainly default and the foreclosure crisis will only be extended into 2012 … right before the presidential election.
and America takes another one in the........
How are these loans gonna help? I do real estate, just had two short sales go to forclosure. They are both better off than saddled with another $50,000
“It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.”
But, ya gotta be BLACK......”redistribution”, ya know.....
How are unemployed homeowners going to pay back a loan?
They are not going to be able to. This is a banker's game to fleece the taxpayer once again.
This has to be the dumbest solution I have ever ever heard? People who are in debt with no job...GET MORE DEBT? Why am I surprised..that’s the only solution the government knows. Is there anyone, anyone who can stop these morons?
What happens when you reward failure and punish success?
Obama should be put in prison for this, it’s grand theft from everyone that honors their financial obligations!!!
....and then in another yr of nonpayments, all loans will be forgiven and you can then apply for another loan as long as your income is lower than $2,145.....for a family of 4.
The liberal DUmmies won’t even grasp that 0bama is giving away handouts to homeowners while leaving renters who can’t pay their rent out on the streets.
“Thank You Sir, May I Have Another?!”
Well look at it this way, 2 years from now they can blame all of the forclosures on those dastardly republicans in Congress!
There is no amount of money you can give my brother in law that he can’t lose within the year.
If someone can’t pay the original loan how does another 50 thou in debt help them?
This admin is full of idiots.
•The existing home sales report will show that sales collapsed in July (this is showing up in all the regional reports).
•The existing home months-of-supply will jump to double digits.
•House prices are probably falling again, although this might not show up in the repeat sales indexes until September or October (this data is released with a lag).
•On August 27th, the second estimate of Q2 GDP will be released. This will probably show a significant downward revision from the preliminary estimate of 2.4% annualized growth. The downward revision is due to lower construction spending than the BEA initially estimated, less contribution from inventory adjustments, and the June surge in exports.
•The unemployment rate will probably start ticking up again soon (or the participation rate will fall further).
With the end of the housing tax credit, calculated risk blogger also (good source) expects residential construction employment to decline further over the next few months.
Elsewhere in Europe and Asia- Germany Economy Expands Most Since Reunification [Singapore On Course For Record Growth] Thailand, Malaysia, Singapore and Vietnam should not be overlooked by investors looking to cash in on the recovery in the Far East.
In Singapore the economy is reported on course for record-breaking growth of up to 15pc for the year. And there are a host of rivals hot on its heels to be the shining star of Asia.
Across the border in Malaysia economic growth of close to 7pc is predicted this year followed by Indonesia at 6.6pc. South Korea and the Philippine's are both on course to hit 6pc growth in 2010
“It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.”
But, ya gotta be BLACK......”redistribution”, ya know....”
Exactly and if that is not bad enough ,Go in any Government office all black!
Insert tirade composed almost entirely of expletives here.
I’m curious to know if Carl Greene, Philadelphia Housing Chief, is planning to get one of these loans after he recently went into foreclosure for not making mortgage payments. This guy makes over 300 K year.
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