Monday, July 4, 2011

New Program: $50,000 in Fellow Taxpayer Money if You Don't Pay Your Mortgage AND (Preferably) Don't Have a Job

In the big picture, $1 billion is a pittance (what a billion amongst friends), but the latest federal program to staunch the housing disaster is like all the others - troubling, unfair, and bemusing all at once. Here is the kicker in this one, you only qualify if you lost income (i.e. thru job loss, underemployment etc). Which I assume would make it hard to make the mortgage payment... but what do I know.

Essentially if you borrow $50K from the government your fellow citizen (interest free), and keep your payments on time... each year 20% of the loan is forgiven. Make 5 years of payment and you get handed $50,000 for free, for acting like anyone else who pays their mortgage. Step right up...

Via SmartMoney:

For 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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