Feds Approve More Money for Troubled Homeowners

Feds Approve More Money for Troubled Homeowners

Congress just approved more money for troubled homeowners. What will this mean for homebuyers and those who are having trouble making their payments?

There seems to be some good news coming down the pike for troubled homeowners and potential homebuyers. As for those looking to buy a home, mortgage rates have fallen for the sixth consecutive week to historic lows. Just when it seems like they can’t get any lower, the drop again. Now is the time to get into the housing market if you have been pondering buying a new home.

As for troubled homeowners, the federal government has just approved another $1 billion allotted for people who are having problems making their house payment as a result of medical conditions or unemployment. The program, titled the Emergency Mortgage Relief program, is designed to help troubled homeowners who are three months behind or more on their mortgage payments. These homeowners can be eligible for as much as $50,000 each in federal loans so they can pay their mortgages.

In addition to this $1 billion, the federal government has two other programs designed to help homeowners when they become unemployed after getting a mortgage. The Treasury Department offers more than $2 billion to troubled homeowners in the states that have been hit the hardest by unemployment. In June, the department gave out $1.5 billion in five states and it has another $600 million for giving out in the next few months. The Home Affordable Employment Program is another program designed to make mortgage payments more affordable through forbearance. Homeowners must be at least three months behind in their payments to qualify and the unpaid amounts can either be repaid in different ways or it can be added to the outstanding balance of the mortgage loan.

The newest program, however, still needs to have some details hammered out. It isn’t clear how homeowners can get money from this new program, which was actually created in 1975 under the Emergency Housing Act. HUD will more than likely be the agency providing the assistance to homeowners who have either had their hours cut way down at work, become unemployed, or become unable to make their mortgage payments due to a health issue. In addition to being three months or more behind in payments, the homeowners must also have a reasonable capability to resume mortgage payments in the near future in order to qualify for the financial help.

HUD spokesman Lemar Wooley said that the agency is still reviewing the legislation before making any comments on how the decisions will be made as to who will be eligible for the aid and who will be ineligible.

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