Federal mortgage program for unemployed homeowners ends without using all its money
Alternative ways to save your home
A $1 billion dollar program created to help the unemployed pay their mortgages will end without spending all its funds. In fact, since only a few individuals met the strict criteria, the Housing Department expects that only 10-15k people will be approved out of the 100k that applied.
The Federal program, modeled after a very successful program in Pennsylvania, was passed last year as part of the Dodd-Frank Wall Street reform bill. The program offered interest-free, forgivable loans to homeowners who lost more than 15% of their income due to economic or medical conditions. In order to qualify the homeowner needed to be delinquent for at least 90 days, facing foreclosure and could resume making payments once they were employed. Once approved, they could receive up to $50,000 or 24 months of assistance, whichever came first.
Unfortunately, the once promising program was plagued with delays and restrictions. Many experts complained that HUD used a complicated formula which took monthly payments, income and arrears into consideration thereby preventing many seemingly eligible people from getting approved. In contrast, the Pennsylvania program had more hardship conditions and reached a greater number of people before ending in June due to budget cuts.
For those who were not approved for the program and still require assistance there may be some other ways for you to get help. One such is to sell the future payments of an illiquid asset in exchange for a cash lump sum. An illiquid asset could be a structured settlement annuity, a divorce settlement, a single premium immediate annuity, life insurance policy, inheritance, royalties, cell tower leases, copyrights, patents or even a pension that results in periodic payments. Unlike mortgage programs, loans and home loan modification there are no income requirements or credit checks because selling your future payments isn’t a loan. There is no affect to your credit score and you can’t default. You do not have to pay any of the money back either.
According to John Zepeda at Rescue Capital, "As a result of unemployment, we are seeing many people who have fallen behind on all their bills including their mortgage. Luckily, they can use a portion of their future payments to get the money they need to avoid foreclosure without incurring more debt."
Sometimes people are unsure if their asset is something they can sell. Zepeda stated, “Rescue Capital speaks to individuals that are unaware that their asset can be sold on the secondary market. We evaluate the asset, determine its value and provide a free no-obligation quote to anyone who calls us”.
Many individuals think that they have to sell all their payments and have never heard about the other options available to them such as deferment. You can defer selling your payments for several years, which allows you to get the cash now but your periodic payments won’t be reduced until later.
According to Rescue Capital, COO Maureen Healy, “Sometimes you need a small amount of money to get back on your feet such as money to move or start a business. Deferment makes a lot of sense for those individuals.” To get your free no-obligation quote as well as more information about the entire process, call Rescue Capital today at 866.688.3532.
Putting Band-Aids on a Stab Wound
Another hot and humid Monday in Philadelphia! As I try to stay cool, drinking my iced coffee and reading the latest tweets and articles, I came across a rather depressing story on Philly.com. The article was about the hidden homeless in New Jersey, living in motel rooms that cost New Jersey $85 a night. One dad, who recently found a new job, lived in the motel with his 5 children. At $2550 per month you can’t help but wonder wouldn’t it have been cheaper to find an apartment for this family? This problem is not limited to just the homeless, we speak to many holders of structured settlements and annuities who end up living in motels because their situations change, be it a divorce, job loss or just a rough patch in their lives.
Homelessness and budget deficits are serious problems in this country. There are so many people who are unemployed or underemployed struggling to get by. Many states and charities are seeing an increase in people seeking assistance, yet their budgets have been severely cut. Times are tough for everyone and many people are doing less with more. So many bloggers and journalists have been writing about ways to stretch your dollar, how to budget as well as how to save. Yet this doesn’t seem to be the case with government.
In a groundbreaking study by the Department of Housing and Urban Development (HUD) in March 2010, HUD discovered that it was more cost effective to help the homeless obtain apartments instead of housing them in temporary solutions. Housing experts suggest that the housing bust and job losses have swollen the ranks of the homeless. Many are families who don't have the same mental illness and substance abuse problems of the chronically homeless. Obviously there is a need to address this situation from a cost stand point but the nation as a whole need to address how these people got into this situation in the first place.
Job training and creation is a step in the right direction. But the government needs to get their spending in check and spend their money wisely. Throwing money at the situation isn’t necessarily the right idea, it’s just a band-aid. Making sound decisions that look at the whole picture including the future is the only way we can thrive and stop the bleeding.
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