Presenting Obama's Latest $50,000 Non-Recourse, Interest-Free Gift To "Troubled" Homeowners

Tyler Durden's picture

Today the Obama administration launched its latest $1 billion "stimulus" in the form of the Emergency Homeowner's Loan Program (EHLP), certainly not to be confused with Homeowner Emergency something something, which would be abbreviated HELP (and would be way too cute). The formal reason for the program is to provide emergency loans to 'homeowners' facing foreclosure, or basically all of them, to help tide them over "a temporary financial crisis", the
Department of Housing and Urban Development (HUD) has announced. The informal reason is to provide thousands of Americans with a $50,000 recourse and interest-free loan for up to two years (money which will go down to paying down equity an underwater mortgage, and will thus never be repaid), so that earned income, instead of being used to make mortgage payments, will be rerouted into such far more critical capital needs as the latest iPad or buying share ot LNKD at $122. But don't think for a moment that everyone will be able to access this money: "the program is available to homeowners who have seen their incomes fall and who could lose their homes to foreclosure due to circumstances beyond their control, including involuntary unemployment, underemployment, economic conditions or an illness" which, actually in retrospect, is all of them. Well, the effort of getting off one's couch and actually picking up the forms may be unavoidable. Of course, that process in itself may well limit 80% of the eligible participants.

More on this latest centrally-planned expansion into Obamanism:

The program is a counterpart to the $7.6 billion Hardest Hit Fund and is available only to homeowners in states not covered by that program. The Hardest Hit Fund provides foreclosure avoidance assistance to homeowners in states that have been most seriously affected by the declining housing market and economic downturn.

The new initiative is expected to provide assistance to up to 30,000 homeowners, with loans averaging $35,000 each. Loans may be used to pay a portion of monthly mortgage bills, including missed mortgage payments or past due charges including principal, interest, taxes, insurances, and attorney fees.

Homeowners seeking assistance must complete a pre-application screening workshop by July 22 in order to be considered for the program. As demand is expected to exceed the amount of funding available, qualifying homeowners will be chosen at random to complete the application process.

States served by the program are Alaska, Arkansas, Colorado, Hawaii, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Oklahoma, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. EHLP is also offered in Puerto Rico.

So what about all those who lived within their means and actually do not need yet another bailout? They get the privilege of funding all of the above.


h/t nobull1994

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Barb Dwire's picture

I just sit on the couch and don't own a home. I'll settle for $5k.

ihedgemyhedges's picture

Gimme da full fitty bitch!!!!!!!!!!!!!!!

oh_bama's picture

My hope is that he is still serious about his reelection. This is politically suicidal in the sense of alienating "everyone else"


I wish he can be the president for another 4 years SO THE FED PUTS ARE STILL IN PLACE! SO WE CAN ALL BTFD~~~


That Peak Oil Guy's picture

At first glance this appears to be insane.  On further consideration, this seems even more insane than the first glance!

Isn't this for the same people who are not paying mortgage for 2+ years waiting for foreclosure anyway?


SilverIsKing's picture

Wait til you glance at it a third time. You'll go blind.

jeff montanye's picture

no arizona, nevada, florida?

also recourse or non-recourse?  headline and post conflict.  if recourse then further depths of debt peonage would result, right?

Jendrzejczyk's picture

Worded wierdly in post, but means non-recourse.

"a $50,000 recourse and interest-free loan" Read it as recourse free and interest free.

CrazyCooter's picture

Ya, but did you think it through ... the other option is ... the establishment republican!

Do the "elite" care about the (R) or the (D)? Obama has pretty much *guaranteed* an (R) the next cycle, but the real question is ... will the next (R) be any different?



eureka's picture

Don't you hate it when DC gives money to individual losers rather than to Wall Street Bank Losers, like George W. did?

you enjoy myself's picture

no one is defending W, jackass.  quadrupling down on stupid is still stupid.

SilverIsKing's picture

4 times as stupid if you ask me.

suckapump's picture

Wouldn't that be 16 times stupid?

Seriously though, I think this new program is ineffective by design. It is the policy equivalent of baby kissing. It makes mom and pop voter all warm and fuzzy while actually doing little more than spreading disease.

Why would the politicians or the banking cartels want any kind of modification program that actually had any chance of success? By my calculations, if one includes the Fanny/Freddie bailouts, the amount of money stolen from future taxpayers and forked over to the banks in the past three years is about $13T. The outstanding balance of residential mortgages in the US has been estimated at about $11.9T.

I do take issue with the last paragraph of the article though. Blaming those who believed the army of lending professionals when they sold mortgages as the path to financial independence is like blaming a rape victim for wearing a t-shirt that said "love to fuck". Sure, the victim is unsympathetic, and her behavior probably harms more respectable women around her, but the real bad actor in that scenario is the guy that perforated her anus by forcibly inserting a twelve pack of beer into her ass despite her screams to stop.

Slartebartfast's picture

Yeah Baby!  Where do I sign up!  When I get my $50K I'm going straight to the coin store and pick up a couple of big boxes of Silver Eagles.  Take that JP!

Oh yeah, we don't actually get the money.  It goes to the banksters.  Shoot!

Dburn's picture

Do what the real-estate agents are doing as the thieves rob the thieves and we keep paying. They go in and tell their banker "buddy" that a short sell is the only way to move a property. Bank agrees, especially if it's in a tranche guaranteed by US taxpayers and sometimes not because, well they are just shit out of cash. They   short sell a million dollar home  at 500K. People in it, rent it for a year from agent who has a buyer which may be the renters lined up to buy it at 600-700K . Then the person who puts up the 600K and the agent splits the 100k+ rent less real estate commissions on both transactions that goes into the real-estate agents hand and the brokers which is 6-7% each trade. Their are agents doing a couple of these a month. It's even better when they were out their working with their banker buddies selling junk for prices that was normally in the Mansion range.

Who knows, JP Morgue may be putting up the money to take it from Citibank since they have the most in Taxpayer guarantees. Which probably means a citibank officer is in it for a cut.

You gotta hand it to these fuckers, just when you think they can't go any lower, they take us down two more levels;

"money for nothing and the fees ain't free

them guys, they ain't so dumb"

TheMerryPrankster's picture

50,000 $ per vote seems high at first, but if you compare it to what Obama paid for the wall street bank votes, its actually quite reasonable.

If you put it in context its not much more expensive than a couple of stinger missiles.

bankonzhongguo's picture

All this money just flows directly to the Banks.

Call it QE 2.9 with sugar on top.

More gravy for the money pigs.

JohnF's picture


This is just a bank bailout prettied up and floated as a first step towards other bailouts.

The banks are hurting and this is their payback for having bankrolled the system...

buzzsaw99's picture

reward the deadbeats with chump change from heaven.

Popo's picture

Now let's see... The family of a responsible renter who has seen an equally devastating loss of income is just as likely to be evicted. Is there $50,000 in loan money for this troubled family as well?

What separates these two cases in terms of need? The "buyer" (I use the term loosely, of course) has acted irresponsibly. The family of the renter has not.

Where is the assistance for renting families in dire need? Oh, right, this isn't actually a bailout for people at all.... Once again, it's a bailout for the banks.

... And that renter? Not only does he not get help, He PAYS for this whole clusterfuck.

Ready to stop paying taxes yet?

buzzsaw99's picture

It's all coming down. They have rewarded the deadbeats with mortgage equity withdrawals, free rent, subsidies, tax breaks. So much money has now been misallocated that a total collapse is assured.

topcallingtroll's picture

Hayek?  I thought you were dead.

snowball777's picture

Truly bizarre isn't it? Like Cloward-Piven turned sideways.

Oh regional Indian's picture

Indeed Buzz, It's socializing America, one bail-out at a time. A billion for a bank, a few thousand for a few "lucky" home-owners. But another couple of programs like this and they'll have the whole country save a few on the teat.

That is when the teat becomes the absolute master. Not even very subtle, these socializing moves. Overt.



TheMerryPrankster's picture

I think you have a typo, you meant to type "sodomizing" instead of "socializing".

snowball777's picture

One of them is a bank liability?

Dapper Dan's picture

 Once again, it's a bailout for the banks


Your God damn right it's for the banks, just like cash for clunkers.

Many don't relize how brilliant the hole cash for clunkers was for the PTB,  it helped the banks that made the loans, the dealerships and the automotive industry, but the real fuck you was the requirement to spike the motor of the trade in car to prevent the resale to Mexico.


 Mexico has been buying so many used cars from the US in the last 10 years,  that a very noticeable drop in oil exports destine for the US was transpiring. 


  We can't have the Mexicans using up "our" gas now can we?


OT,  it looks like Obummer tells us Wed.  that the troops are needed back home to suppress the insurrection.







Fed Supporter's picture

If ZH prides itself on seeing the big picture, they missed this one by the way it was titled.  

If you do the math the average home price a few years ago was say $230,000.00 at 6.5% on a 30 year that equates to 1 years interest payments of around $15,000.00.  Since the loan period is to assist over 2 years that would approx $30K directly into the banks' pockets. So if the average loan is around $35K that would be about right, with your average Joe gaining $2500.00 per year paid toward his principle, taxes and insurance.  Someone like Trader Mark must have written this post, very bitter that people are losing their jobs and hence their homes due to wall st. fraud.  But let’s keep bashing the squatters.  Remember only about 25% of all defaults are strategic.

For all you who think the bankers are going to be stupid enough to lend $50k lump sum no strings attached all at once are smoking some good stuff.

Don't be fooled this is another bailout for the banks.  The loan is going to be trickled out each month in increments equal to your loan payments.

This is a Greek style bailout, who cares if the average Joe pays it back the money will end up where it was intended.

Also, if you default it may be recourse free as far as a defeciency judgment goes but I doubt the IRS will let you off the taxes owed on defaulted money that is not pursued, the dead beats would then have an additional 50K in taxable income to top it all off.

blindfaith's picture

You write the same things I was thinking, especially about the tax liability...Merry Christmas from your President, oh and (like winnings from a TV game show) you own the US Gov $10,000 in taxes.

Our great leader can't bail out the banks again directly, so lets do it thru the back door and then the 'deadbeats' will get the blame.


WHERE IS THE REPUBLICAN AND TEA PARTY pundants??? to damn busy with NPR and Planned Parenthood destruction.

Dburn's picture

Popo, you don't understand man.


A lot of the "landlords " are renting their foreclosed homes to other people who were dumb enough to move. See , the landlord could call for home improvements for the loan, etc and have a buddy lined up a stick another 50G, less buddy's cut, in his pocket for when the 200K houses that were 800K are at 100K or even lower as he gets 30-40K a year from renting his house as he keeps raising rates until they say "No Mas". Sleeps in his RV and is putting away money from that and the e-book he wrote on Amazon to tell others how to do it.

I mean how did you react when you found out that former Countrywide execs were buying Govt foreclosures (See the FDIC) homes in large lots at 10 cents on the dollar and holding the mortgages after taking a 30% modification?

You think the other thieves didn't notice?

Everyone who made money on the long side of this trade is making money on the greasy short side. We still get the bill. Damn a hustler in a high market area could easily pull down 5 Million a year if they are good at multitasking and hey, what about the agents for 10 Million+ homes that are empty in Greenwich CT. Meanwhile the bankers are calling the program Banker Bonus(er) Enhancement Entitlement. (BBEE)

Be all that you can be

Ben Fleeced's picture

What you gonna do buzztroll?


buzzsaw99's picture

i stick it to the man every chance i get.

topcallingtroll's picture

How do you do it?  I wanna play too.

CrazyCooter's picture

Since you are trolling ... might I suggest moving to Alaska? Pretty country, all the huntin'/fishing' a troll could want. Stock the freezer, learn to can, and a bit of ZH in the slow spots!



Shell Game's picture

1. They hate it when you live within your means and don't over consume.

2a. Do not borrow money (unless you have a good business plan and can patiently put up with dozens of .gov fees and taxes).
2b. Cut up your credit cards.

3a. Remove your money from the Ponzi scheme.
3b. Take early withdrawal from IRAs and other ret. plans if possible.
3c. Buy physical metals and hold them yourself.

4a.  Learn to shoot and work on marksmanship.
4b.  Learn to reload your own ammunition.

5.  Grow food, even a little.

6.  Participate in local government, this shit will be put together from community up, not top down.


I could go on and on.  But you see that self-reliance and the refusal to play in their game is the best way to stick it to the Man. 


riley martini's picture

 Reward the dead beats , I don't think so if you read it that money goes straight to the banksters and attorneys . Reward the banksters for making fraudlent loans, fascism at it's finest . Followed by a round of bonuses and political party contributions. Is it any wonder honest workers feel cheated .

buzzsaw99's picture

you are correct of course. our fellow citizens do not mind being used in this way. sooner or later the gravy train with the biscuit wheels will run out of track even for the bankstas. fear not, the end is nigh.

Havana White's picture

I wish nigh would hurry up already.

blindfaith's picture

you are correct of course. our fellow citizens do not mind being used in this way.


The citizens are dumb as dirt and we all know it.  You send them info, tell them all that is going on, and what do you get...blank stares, or 'please don't send me any emails unless it has to do with puppies, kittens, or sports'.


The US citizens are cattle and being treated as such.

New Normalist's picture

The new rule to game the system in the good ol' USofA: Either become super rich, or super irresponsible.

Calculated_Risk's picture

or be both and become a banker/politician/lawyer.

seek's picture

And if you are neither, hide your shit and GTFO of the system now! Those other two categories want all you got.

wesa's picture

This is horrible.

molecool's picture

Moral hazard galore - the more you fuck up the more coin you bank. Capitalism for dummies - when's the book coming out?

CrazyCooter's picture

Crapitalism for dummies?

I have no doubt someone said this before me, but it was the first thing to cross my mind in context of the article ...



TheMerryPrankster's picture

Molecool, for some reason, you remind me of the laughing man. We really could use him in a time like now.

agrotera's picture

Another robbery out of the pockets of American tax payers for generations to come--each $50,000 goes toward more money in the pocket of the corrupt entities that run our country (agents of the privately owned Federal Reserve corp. aka toobigtofailbanks) so that when there the US is officially bankrupt, the Federal Reserve's agents can claim all equity, this $50000 plus other cockamamie programs that the Federal Reserve puppets in Washington DC will come up with  (our pres is their #1 puppet, congress is the back up to write legislation to legalize the criminality of these bailout/robberies)

fxrxexexdxoxmx's picture

EHLP is also offered in Puerto Rico.

How much are the Fed Taxes in P.R.?