Loans For Unemployed Homeowners
Congressman Barney Frank wants to set aside $2 billion in rescue funds that banks have repaid to help unemployed homeowners avoid foreclosure.
Frank is reportedly planning to introduce a bill next week that would give homeowners who’ve lost their jobs and can’t keep up with mortgage payments loans.
Experts are predicting that a second wave of foreclosures will hit because of the high unemployment rate.
In Connecticut, there have been 3,618 foreclosures in the first eight months of the year, according to The Warren Group.
The number of lis pendens, which are the first step in the foreclosure process in Connecticut and indicate how many homeowners are at risk, has jumped 34 percent to 18,706 from 13,995 a year ago.
While Frank’s plan sounds reasonable to advocates who are trying to help struggling homeowners who live in Connecticut and other states, here’s one wrinkle with the plan: the money homeowners receive must be repaid.
In other words, this would only saddle unemployed workers who already have trouble paying bills with more debt.
A better long-term solution is to support policies that will create more jobs and boost the employment numbers.
Frank said the House Financial Services Committee, which he heads, will begin to consider such job-creating policies in January after it wraps up the work it’s doing overhauling the regulation of financial institutions.
Instead of waiting three more months, Frank and his buddies in Congress should start that process right away.