Mortgage Crisis: 5 States to Receive Mortgage Assistance through Federal Funding

| June 25, 2010 | 0 Comments

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Arizona, California, Michigan, Florida and Nevada were among the 5 states that proposed the idea of receiving 1.5 billion dollars in mortgage assistance through federal funding to help ease the impact of the recent mortgage crisis.

The money will primarily be used to subsidize mortgages so that homeowners can watch their mortgage principals fall. The portion left over will go toward paying off liens or to facilitate short sales.

Treasury assistant Herbert Allison said that “these states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosures.”

The proposed funding will be able to go toward around 75,000 households across these 5 states.

While some officials and experts are praising the proposals are a good way to help homeowners pay off their mortgage and get things headed in the right direction as far as the housing slump is concerned. Other experts say that these proposed funds could encourage those who are already unemployed to remain unemployed. Some experts are worried that by paying off some of these mortgages that the recipients of the funds will feel less of a need to return to the workforce.  This is not such an unrealistic fear as many who are given government funding now do very little to look for work.

Currently, states such as Arizona and Florida are relying on matching funds from loan servicers to help home owners with their mortgage payments.

The federal government has 2.1 billion dollars to give to 10 other states in mortgage trouble; including North and South Caroline, Ohio, Rhode Island and Oregon.

The U.S. Treasury will make an official ruling on the 5 other states in August.

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Category: Business & Finance News, Featured News, Global News

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