Posted on August - 10 - 2010
Tennessee will get $81 million from new $3 billion federal initiative for homeowners
Aid to unemployed homeowners
More housing aid: The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation’s toughest job markets.
Hard-hit states: Of that money, $2 billion is going to 17 states where unemployment rates have been higher than the national average over the past year.
Emergency loans: Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with zero-interest rate loans of up to $50,000 for up to two years.
WASHINGTON — Tennessee will receive $81 million of the $3 billion that the Obama administration is providing to unemployed homeowners facing foreclosure.
The Treasury Department said Wednesday that it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.
Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.
Tennessee’s jobless rate is 10.1 percent; the national rate is 9.5 percent.
Memphis attorney Webb Brewer, whose firm Brewer & Barlow represents a number of people facing possible foreclosure, said of the new program, “Like everything else, it seems to me the devil is in the details as far as how the plan will work.”
One key is whether the money benefits individual homeowners more than banks, he said.
Initially, many people got in trouble with their mortgages because of predatory loans, Brewer said.
“Now, it’s a lot of economic issues where people lost jobs or had hours cut or pay cut,” he said.
The administration was required to launch the HUD emergency loan program by the financial regulatory bill signed by President Barack Obama last month.
The Treasury is using money from the $700 billion Wall Street bailout to pay its share of the program. Officials said they won’t know until next month how many people are likely to be helped.
California will get the largest share of money for the Treasury program, at $476 million. Florida is in line for nearly $239 million. Illinois will receive $166 million and Ohio will receive $149 million.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure.
That program, known as Making Home Affordable, provides lenders with incentives to reduce mortgage payments. So far, it has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009.
Also receiving money are Michigan, $129 million; Georgia, $127 million; North Carolina, $121 million; New Jersey, $112 million; Indiana, $83 million; Alabama, $61 million, South Carolina, $59 million; Kentucky, $56 million; Oregon, $49 million; Mississippi, $38 million; Nevada, $34 million; Rhode Island, $14 million; and Washington, $8 million.
Staff reporter Tom Bailey Jr. contributed to this article.
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