Earlier this year the U.S. Department of Housing and Urban Development (HUD) announced that $1 billion was being released to assist unemployed homeowners struggling with their mortgages. The funds were supposed to be released this spring, but the program may have hit a wall as the House just voted 242-177 to end the program before it even rolls out.
EHLP Details
The Emergency Homeowners' Loan Program (EHLP) was created as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act on July 21, 2010. The program was created after 60 national consumer advocacy groups joined forces and summoned HUD to develop a plan to help unemployed homeowners. In response, the agency prepared itself to launch EHLP to assist individuals who were overdue by one or more months on their mortgage payments.
ELHP has been constructed to provide assistance to homeowners in regions not protected by the hardest hit fund. The program is to provide struggling homeowners up to a $50,000 interest free loan in order to better handle their monthly payments, property taxes and mortgage insurance premiums for up to 24 months. EHLP will offer the assistance to homeowners in Puerto Rico and 32 states who did not qualify for the money provided by the hardest hit fund. All the housing programs created under the Dodd–Frank Wall Street Reform and Consumer Protection Act were done in order to strengthen and stabilize the economy that crumbled under the mortgage meltdown that started to plague the nation towards the end of the decade.
Other Programs Cut by House
The House of Representatives currently has a Republican majority and since being elected into power, the group has vowed to cut government spending in order to balance the nation's budget. Aside from the House pledging to remove government funding from agencies including National Public Radio (NPR), Planned Parenthood and threatening to disband the Environmental Protection Agency, housing programs have also become a target on their radar. The housing programs approved under the Dodd-Frank act have price tags in the billions of dollar range. EHLP is only one of the housing programs the group has rejected, as there are a myriad of housing programs that the House has voted to terminate.
Last week the House voted to cease funding the Federal Housing Administration’s (FHA) newly created Short Refi program. The agenda for the week of March 14, 2011 will feature the House debating two more bills that would end the Home Affordable Modification Program (HAMP) and the Neighborhood Stabilization Program (which would fund the rehab or demolition of 100,000 homes abandoned due to foreclosure). Because of the balance of power, industry insiders expect those bills to pass with ease. The activity comes as no surprise to individuals monitoring House activities, as earlier this year it was announced that the freshmen class planned on axing several federal housing programs.
Glimmer of Hope
If the bills pass through the Senate, the Obama Administration has announced that they would be vetoed. However, it is believed that the bills would not even make it that far as "dead on arrival," once they reach the Senate. (HousingWire.com).
Unemployed homeowners in financial distress should not be deterred by the latest house activity, and should still consider ELHP a valuable resource. It is expected that 30,000 homeowners will take advantage of EHLP as planned, with $135 billion being slated for Texas $111.6 million for New York and $105 million for Pennsylvania borrowers.
