Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Another homeowner aid program failed – can’t even give away money

Emergency Homeowners’ Loan Program flop

Since the 1980s, Pennsylvania set up a program to help struggling homeowners which has enjoyed great success over the decades, inspiring part of the Dodd-Frank Wall Street Reform Bill passed in 2010. The Dodd-Frank provision offers homeowners who had lost a minimum of 15% of their income due to the economy or health problems. Help came in the form of interest-free, forgivable loans, and it was a noble cause, but one that most economists say has failed horribly, tangled in red tape and agency confusion.

The $1 billion Emergency Homeowners’ Loan Program will not even end up spending half of their budget because so few homeowners qualify and the program has experienced several delays. Applicants are required to be over 90 days delinquent, facing foreclosures and show proof that if they found a new job they could resume their normal mortgage payments.

One tough requirement is that homeowners can only have lost their job in the last 12 months, but many applicants have been unemployed for well over 12 months. The formula took into account income, arrears and monthly payments in a way that was so complicated, most applicants were rejected from a program set up to offer 24 months of assistance or $50,000 of aid (whichever came first).

Why such a loud public uproar?

The uproar over this failed program is that the initiative was promoted as a means to help the homeowners that could not qualify for other programs like HAMP that also failed to live up to the promise of helping millions of struggling homeowners. The program was promoted as an end of the line option for the underserved and was promoted as such, but the red tape is simply too restrictive to make the program work as designed.

Advertisement. Scroll to continue reading.

This Friday, the Housing Department has to complete approval on the remaining applicants and anticipate that roughly 10 percent of the 100,000 applicants may qualify and will likely receive only $35,000 to $45,000 in aid, short of the $50,000 goal. “No one could have anticipated how difficult the statutory requirements make it to reach homeowners,” said HUD spokesperson, Lemar Wooley.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.


Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Business News

(Business News) When a well known Realtor and his loan officer wife get rich off of $50 million in falsified loans and wash profits...

Housing News

Although the average contract interest rate fell for many types of loans, mortgage application volume fell - the MBA points out that Columbus Day...

Housing News

One Bank of America employee has been charged with a scheme that put over $1 million in his pocket.

Housing News

If you follow the money at several major foreclosure mill firms, the abuses being discovered at various levels are astounding. One state is investigating,...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.