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.