The Obama administration’s attempts to fix the housing crisis, so far
The Obama administration has taken several stabs at stemming foreclosures and reviving the housing market. Here is a look at some of the administration’s largest programs:
Description: It is the Obama administration’s largest effort, by far, to help struggling homeowners. The program uses funds from the Troubled Asset Relief Program (TARP) to pay lenders that modify the mortgages of troubled homeowners to create more affordable payments.
Homeowners Helped: More than 600,000 homeowners have a permanent loan modification. But the Obama administration initially expected the program to help up to 4 million homeowners, which now appears unlikely.
Price Tag: Nearly $30 billion in TARP funds were set aside for an umbrella housing program, known as Making Home Affordable. HAMP is its largest component. So far, about $1.42 billion has been spent.
Description: The program allows borrowers with little or no equity in their home to refinance into lower-interest rate mortgages. Borrowers must have mortgages backed by Fannie Mae or Freddie Mac, but can owe up to 25 percent more than their homes are worth.
Homeowners Helped: Nearly 800,000 borrowers have been able to refinance under the program so far, but that is far fewer than originally expected. The deadline has been extended to June 2012.
Price Tag: The Federal Housing Finance Agency, which regulates Fannie and Freddie, does not assign a specific cost to the program and agency officials say the program likely saves the firms money by keeping some borrowers out of delinquency.
Description: Qualified unemployed borrowers receive a loan of up to $50,000 over two years. The no-interest loan is forgiven over five years if the borrowers keep up with their mortgage payments.
Homeowners Helped: The program could help up to 30,000 borrowers, who have until July 22 to apply.
Price Tag: Congress allocated $1 billion for the program.
Description: The program provides aid to families in states hit hard by the economic and housing market downturn. State housing finance agencies were tasked with creating locally tailored solutions to the housing crisis.
Homeowners Helped: It’s early. Most states who qualified for the funds just recently launched their program. About 70 percent of the housing agencies established programs for unemployed workers, while another 20 percent are focusing on lowering the mortgage balance of borrowers who owe more than their homes are worth.
Price Tag: About $480 million of the $7.6 billion allocated for the program through TARP has been spent so far. States have until 2017 to use all of the funds.
— Renae Merle
Sources: Washington Post reporting; Treasury Department; Department of Housing and Urban Development; Federal Housing Finance Agency