A new federal program is now offering financial aid that DOESN’T need to be repaid. That’s right – free money. The government will be giving away funding to those that have fallen behind on their mortgage. To the lucky few who pass the application process, this program could save each homeowner over $30,000.
This program is called the Emergency Homeowners’ Loan Program. The goal is to close the foreclosure flood gates that have opened all across America. Armed with $1 billion, I sure hope this program is successful. At the rate our current government administration is giving away money without results, call me skeptical.
The Housing and Urban Development (HUD) division says this program is meant to be a short-term relief to those that can get back on the proverbial horse in the near future. The loans will be MUCH better than any bank can offer. The loans are completely interest-free. Loans go directly to the mortgage lender and can be put toward past-due and future payments. The assistance period lasts for up to 2 years, and 20% of the total loan is forgiven each year the homeowner stays in the home after the assistance period ends. That means 5 years of steady home payments after the assistance money stops can net qualified Americans up to $50,000 FREE. It almost sounds too good to be true.
The catch occurs when a qualified borrower sells the home in under 5 years. If a home is sold early, the homeowner is required to pay back the remaining balance on the loan. For example, a home sold after 2 years is required to pay back only 60% of the loan.
Current numbers show an estimated 4 million homeowners are behind on their mortgage by at least 90 days. That is a conservative number by my count. This loan program is estimated to help less than 30,000 of these homeowners. What happens to the other 3.97 million troubled homeowners? The other 99%+ are out of luck with this program. What do you think. Does helping less than 1% of troubled homeowners seem fair? Will helping less than 1% of homeowners benefit the economy?
For those having trouble with the mortgage, applications for this program were released almost 2 weeks ago, and the deadline is July 22, 2011. To be eligible for assistance, applicants must have lost income due to involuntary job loss, underemployment, or a medical problem. Other economic conditions will be considered. The homeowner’s home must be at risk of foreclosure. For more information visit the NeighborWorks website.
My name is Jared Heathman MD, and I am a finance author/physician. I want to help you maximize your wealth for free. Visit me and learn more at http://www.RichAsChocolate.com
By Jared Heathman