“These are people who are very responsible, very thoughtful. They got a home, it’s above water, they’ve got equity, but they’re unemployed, and you can’t afford mortgage payments on unemployment,” said Frank, D-Mass.
Rep. Barney Frank said Monday he is pushing a proposal to use some of the interest the government collects from the financial industry bailout to give loans to unemployed homeowners struggling to pay the mortgage.
The lack of aid to jobless homeowners has been identified as a big weakness in the Obama administration’s plan to tackle the mortgage crisis. A report by a congressional oversight panel said last month that the $50 billion program “was not designed to address foreclosures caused by unemployment,” which are now the main cause of default.
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The unemployed homeowners need a special provision that will allow them to have their payments deferred. This isn’t a bad idea.