Posts Tagged ‘TARP’

More Foreclosure Assistance Provided In Financial Reform Bill

As the financial reform bill continues to make its way through Congress, at least one measure has been hammered out: a plan to combat mortgage foreclosures styled after the Pennsylvania HEMAP program has been approved by both the House and Senate.  I wrote about the HEMAP program in an earlier blog post.

The plan, called HEMA, would take $3 billion from unused TARP funds to provide assistance to homeowners in financial distress.  HEMA will require servicers and lenders to inform homeowners of the program availability before starting the foreclosure process.

If the homeowner is accepted into the program, he or she would make a small payment, based on what is affordable to the HUD and HUD would remit the full payment to the homeowner’s servicer. Payments would continue until the homeowner’s financial problems were resolved, whereupon he or she would resume making the full mortgage payment to the servicer and would also need to repay HUD for the payments advanced.

It is unclear how closely the HEMA program mirrors the HEMAP program, but if it is fairly close, any repayment of advanced monies would be over a long term period of time and capped at a level that is affordable for the homeowner.

The inclusion of a foreclosure assistance program within the financial reform bill is welcome news. Unlike HAMP, the HEMA program will carry the full force of law, which means that servicers and lenders can be forced to comply.

Elizabeth Warren On The Collapse of The Middle Class

My arm is hurting too much for me to type much today, so I bring you a video of a great talk by Elizabeth Warren, who currently is overseeing the TARP bailout and is a Harvard law professor. She’s a very smart woman who saw the financial collapse coming. It’s a bit long but worth a listen.

 

New Efforts To Aid Homeowners Won’t Cost The Taxpayers Another Dime

Further efforts to abate the foreclosure crisis won’t cost the taxpayer any additional money is the word from the Obama Administration. This includes the new HFA Hardest Hit allocations and revisions to HAMP to reward lenders who write down principle balances.

This is because all of the money that is being used is coming out of  TARP (Troubled Asset Relief Program) funds. $50 billion, to be exact, and the government has come nowhere close to that allocation.

While the Wall Street Journal calls this $50 billion a “slush fund,” it is a good thing that further outlays from that fund need no congressional approval. If they did, it would be likely that programs like HAMP, designed to help struggling homeowners would get bogged down in congressional politics.

It is also a good thing for taxpayers already laboring under massive budget deficits run up in the last decade.

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