New $3bn Foreclosure Prevention Program Added to Wall Street Reform Bill
The Senate passed the Restoring American Financial Stability Act last week, approving a new program that would reduce mortgage payments for the unemployed. The program would provide $3bn from the Troubled Asset Relief Program (TARP) to lend up to $50,000 to unemployed homeowners, who could reasonably resume making payments again within two years. The program was modeled after the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) in Pennsylvania. The Senate passed the bill last week but transplanted its own language into the one passed by the House of Representatives. The status of the reform is still “resolving differences.” But, lawmakers hope to have it in front of President Obama to sign by the July 4, 2010 recess. HEMAP has provided $236m to the unemployed to help with foreclosure relief. Rep. Chaka Fattah (D-PA) introduced HEMAP in Pennsylvania in 1983 and introduced it to the new federal bill before the Senate passed it. Fattah originally tried to introduce the bill to Congress in 2003, then again in 2007. “American’s need help, 8% of all mortgage holders are currently at risk of losing their homes and that is unacceptable,” Fattah said. Unemployment rose to 9.9% in April, according to the Department of Labor. The share of US mortgages at least 30 days delinquent or already in foreclosure did slip to 14% in Q110, but remain at heightened levels, according to the Mortgage Brokers Association (MBA). Write to Jon Prior.