Philadelphia Unemployment Project

There is a serious proposal to provide $3 billion in federal funds to offer loans to homeowners facing foreclosure due to unemployment.  This is found in the Financial Reform legislation that recently passed the House and Senate.

The current recession was brought on to a large extent by a collapse of the subprime housing market and subsequent bursting of the housing pricing bubble.  The Obama Administration put forward a $75 billion program to prevent foreclosures called the Home Affordable Modification Program or HAMP which was focused on families with high priced subprime mortgages. 

Unfortunately, as the recession has grown the cause of foreclosures has shifted from subprime mortgages to unemployment.  A recent study by NeighborWorks found that 58% of foreclosures are now caused by joblessness.  HAMP offers next to no help for the unemployed and this needs to change.

The number of homes repossessed, the final stage of the foreclosure process, reached a record 92,432 in April. That is a jump of 45 percent from April 2009, according to RealtyTrac.  Nearly 5% of all mortgages were in foreclosure in the first quarter of 2010, another record according to the Mortgage Bankers Association.

So with foreclosures setting new records the main government program to prevent foreclosures does not assist the 58% of the families facing loss of their homes due to unemployment.

The Financial Reform bill that recently passed the House has $3 billion to help jobless homeowners pay their mortgages.  This provision is now in a conference committee to decide the final law.  We encourage people to contact Conference Committee Chairs Rep. Barney Frank (D-MA)  202-225-5931 and Senator Christopher Dodd (D-CN) at 202-224-2823 and urge the Conference Committee to include in the bill the provision to offer loans to jobless homeowners to prevent foreclosures.

For more information you can contact Philadelphia Unemployment Project at JDoddsPUP@aol.com_ (mailto:JDoddsPUP@aol.com)  or  215-557-0822.