President Obama’s Emergency Homeowner Loan Program is about to shovel $3 billion more at foreclosures. One part of the plan, announced Wednesday, includes a new $1 billion program that will offer loans to unemployed borrowers at risk of losing their homes. The loans, which will be dispersed through nonprofit and housing agencies, will carry 0% interest and be good for a maximum of $50,000 for up to two years. The administration also added $2 billion in support for its program that helps struggling homeowners in the states with highest unemployment rates.
The government previously announced $2.1 billion for 10 of the hardest hit states. States were required to put together proposals on how they would use the money, and the Treasury finished approving those plans earlier this month. The additional $2 billion announced Wednesday will expand the program to a total of 17 states, and the nation’s capital, all of which have suffered unemployment rates higher than the national average for a year. Diana Olick’s take: “…the trouble today is not that so many more people are losing their jobs, it’s that those who have already lost their jobs are having a hard time getting new jobs. Plus they’re already way behind on all kinds of debt. By giving many of these folks cash to pay their loans, the government is essentially putting them deeper into debt.”