Wednesday, June 22, 2011

Virginia Gets $44M of $1B Obama Plan to Prevent Foreclosure For Unemployed Workers

Charlottesville foreclosures just jumped 25%, and the Spring selling season is weak, and nearly 30% of Virginians owe more than their house is worth.  Virginia housing is suffering like other areas in the US.

To help prevent more foreclosures, the federal Housing and Urban Development "Emergency Homeowners' Loan Program" will offer up to $50k, two year, interest free loans to qualified mortgageholders who are unemployed, underemployed, or facing economic challenges.  Of the $1B, Virginia has been earmarked for $44M.  Approximately 1,000 Virginians will receive the aid; after prequalifying, approved candidates will be selected by lottery.  For commentary, see Zero Hedge.   NBC29 provides some local commentary in the video; the $ is erroneously referred to as a "grant."  ELIGIBILITY here.

2 comments:

Montpellier said...

Wow...just kicking the can down the road in a big big way.

I'm supportive of government intervention, but at some point you have to realize this is never going to 'cure'. The 'under' employment problem is the new permanent problem.

There is a permanent, deflationary, wage cram-down underway, and while I think that's brutal, unfair (particularly after we saved the banks) and bad for the long term health of the country, there appears to be no appetite for the kind of stimulus that might actually generate some wage growth.

Given that, these measures only delay the inevitable pass-through of deflation from wages into prices - for housing and everything else. Bridge loans which treat this insolvency crisis as a liquidity crisis are just dragging out the period during which the consumer/worker (not rentier) suffers from low wages and high prices - all in the interest of propping up rentiers.

Art Nesten said...

Well.

...

At least it's a loan to struggling folks and not to Wall Street with the naive and historically unjustified hopes that the benefits will trickle down to the bottom 80%.