Out-of-work homeowners get little help

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The New York Times is pointing to a "new round of finger-pointing" over government programs meant to help keep homeowners from foreclosure.



The short version: The administration's main program for helping to keep homeowners out of foreclosure continues to be aimed not at those who need help most -- unemployed homeowners -- but at people who took out risky mortgage loans. Programs to help out-of-work people, despite tons of money, have few enrollees. And that's not because no one needs the help.


There is "a mismatch between the homeowner program's design and the country's economic realities -- and a new round of finger-pointing about how best to fix it," says the Times.



Morris A. Davis, a former Federal Reserve economist, estimates that "as many as a million homeowners slipped into foreclosure because of insufficient help for the unemployed."

The administration's housing effort does include programs to help unemployed homeowners, but they have been plagued by delays, dubious benefits and abysmal participation. For example, a Treasury Department effort started in early 2010 allows the jobless to postpone mortgage payments for three months, but the average length of unemployment is now nine months. As of March 31, there were only 7,397 participants.
"Critics of the Obama administration's approach to preventing foreclosures have pressed for two years to get officials to focus more of their attention on unemployed homeowners, with meager results," the Times says.



"The money was there and they didn't spend it," Davis, an associate real estate professor at the University of Wisconsin, told the paper. "I don't mean to sound outraged, but I am pretty outraged."



As part of the 2008 bank bailout, the Treasury Department received $46 billion to help keep homeowners in their homes. Spent so far: $1.85 billion.