The Obama administration’s latest effort at foreclosure prevention couldn’t come at a better time for Florida, where foreclosed properties made up nearly 40 percent of home sales in early 2010.
It will help, however, if this program actually works.
Florida is to receive $418 million in repaid financial bailout money from the administration’s $1.5 billion Hardest Hit Fund. This is one of five states that had a 20 percent or greater decline in average housing prices, and thus are eligible for the money.
The Florida Housing Finance Agency will administer the money, and hopes to assist 12,000 homeowners through its Mortgage Intervention Strategy, a program that will make up to nine months of mortgage payments for unemployed and underemployed homeowners. The agency will work with lenders to get them to forgive up to an additional nine months of payments.
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I guess you sort of have to ask yourself if these mortgage bail outs are worth the effort. Most of these loans were made to unqualified individuals. 78% of these modified loans will never materialize into a long term mortgage. Many of these people just cannot afford a large mortgage payment. The Fed just seems to want to drag out the inevitable.