Listening to Jason Lewis explain the housing crisis has convinced me that what we need the very most is for the flood of home foreclosures to hit bottom, so that the housing market can find equilibrium. With so many desperate sellers and banks trying to get rid of unwanted houses, home prices will continue to plummet. When foreclosures and desperate sellers have been "worked through" the market, and the supply of homes for sale begins to settle in to a good ratio with the demand, prices can begin to work upward again.
Every time the federal or state government interferes with the foreclosure market - whether it be through laws raising the burden on banks of justifying foreclosure, prohibiting foreclosures, lengthening grace periods before foreclosure, aid programs for struggling homeowners, or bank bailouts - the housing market is prohibited from reaching rock bottom, which is directly preventing the recovery in the housing market.
And to top off the damage, the people who are receiving the money, of course, believe it's a godsend, and will never be convinced that it is destroying the housing market for the rest of us who actually pay our mortgage.
Oh, and the math doesn't add up. 4 million people times $50,000 is $200 BILLION, not $1 Billion.
And reading into this, it appears more as a bank bailout than a homeowner assistance program.
More Money for Struggling Homeowners
A new federal program is offering aid with a sweet kicker: It doesn't need to be repaidFor 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.
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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. [Sounds like a bank bailout, not homeowner assistance; IDP] 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.
Much more disgust to be had at the link...
