Emergency Homeowner Loan Program Cancelled by the
House
In October of 2010 President Obama put into motion a series
of anti-foreclosure efforts in an attempt to assist homeowner in keeping their
homes. The Republicans have moved to eliminate this funding. The Republicans
have four sessions planned in order to get the programs eliminated. Last week
the House approved to end the Federal Housing Administration Short Refi Option
for people who had a debt the equaled more than the cost of their home.
A Virginia Republican Representative was quoted saying “this
is about programs that aren’t working” A North Carolina democrat was quoted
saying “the Republican measure is mean-spirited and these are the people who
had jobs, fell on hard times. All we’re saying is give them a break for 12
months and an opportunity to go back into the marketplace and find a job.”
In March of 2011 the US House voted a whopping 242-177 to
cancel the Emergency Homeowner Loan Program (EHLP). This program was originally
for those homeowners who had lost their jobs. This $1 billion loan program had
been funded by the democrat –led Congress but because the Republicans took
control of the House it was cancelled before any money had been spent on it.
Applications were expected to be taken in the Spring of 2011. There were to be
approximately 30,000 or more people expected to receive interest free loans up
to $50,000 that would cover their mortgage payments and fees for 2 years.
The Republicans are done yet. Next week the House is
scheduled to vote on another bill that is part of the Presidents
anti-foreclosure efforts. The
Obama’s Home Affordable Modification Program (HAMP) goes on the table.
According to this program the banks would be paid to do a loan modification for
a homeowner. A loan modification is a
program that modifies a mortgage loan to a payment the homeowner can afford.
This would also increase the length of time to pay it off as well. This program
would lower a home owners mortgage payment to 31% of their gross monthly
income. A standard modification would lower a payment by 40% resulting in some
payments dropping as much as $1000 a month. As with any program you would have
to meet the qualifications to be approved.
To become law, the bills must clear the Democrat-controlled
Senate and be signed by the president. Of course that is if the Republicans
don’t step in first.