Help for Unemployed Homeowners

?The current administration claims it is once again trying to make life a bit easier for homeowners who lose their jobs to keep their homes from foreclosure. The administration announced that two programs providing unemployed homeowners temporary relief on their mortgages will be extended to 12 months. Although thousands of homeowners might benefit from the additional time to pay, the real problem is that not all jobless homeowners will be eligible for the program.

Many see this latest action is being taken as part of the administration’s effort to bolster the sitting president’s chances of reelection in 2012 at a time when unemployment still remains above 9% and the economy struggles to rebound. For the month of May 2011, 6.2 million people remain without work for at least 27 weeks and new figures from the next Jobs Report due for June will probably not be any better.

Despite his previous attempts to put an optimistic spin on the nation’s non-materializing “recovery,” President Obama did admit that housing has been the most difficult problem to solve as the nation struggles to recover from its worst recession in decades. At a recent and apparently staged Twitter town hall forum where the president dodged the hard questions on the economy at the White House, he did admit, “The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected, and so that’s continued to be a big drag on the economy. We’ve had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up.” With the usual optimism Obama said, “We’re going back to the drawing board, talking to banks, try to put some pressure on them to work with people who have mortgages to see if we can make further adjustments, modify loans more quickly.”

Although the Federal Housing Administration began offering four months of mortgage relief to unemployed homeowners nearly ten years ago, the latest version of assistance is called The Home Affordable Modification Program (HAMP) and has only been offering three months of relief to the unemployed since last year. Banks and the mortgage brokers who service mortgages under the program are expected to follow its voluntary guidelines and must comply with the new standard. Those wishing to qualify for mortgage forbearance under the HAMP rules must be unemployed people who are currently looking for jobs.

Unfortunately the program does little to address the needs of those homeowners who can afford to pay a portion of their loans, as they must continue to pay without assistance or help for their efforts to stay afloat in the ongoing recession. Although the HAMP program is intended to help reduce the growing number of foreclosures around the nation, whether or not it will be successful remains to be seen. It almost a sure bet that most unemployed homeowners facing imminent foreclosure would prefer to have jobs and make their own mortgage payments instead of simply getting a temporary government handout.