Recovery-busting unemployment and foreclosure crises roil on
The Washington Independent’s Annie Lowery today drills into the deep end of the linked unemployment and foreclosure crises, contrasting a story of impending family homelessness and the so far mostly failed efforts in Washington to boost the national economy by bringing relief to individual desperate families.
Here, as Lowery puts it, is the “fundamental equation of the economic crisis” yet to be fully addressed: “Unemployment drives foreclosure, and the two are jointly destroying middle-class wealth as the effects of the recession linger on.” Consistently dipping middle class wealth means no recovery.
The Obama administration’s efforts to help [unemployed] homeowners thus far have faltered, failing to put a dent in the wave of home losses. Two new programs are specifically designed to help unemployed people undergoing foreclosure… But for many, it might be too little, too late.
This week, the Home Affordable Modification Program — the administration’s flagship effort to help homeowners by letting them refinance for lower monthly mortgage payments and thereby avoid foreclosure — reported dismal numbers. In recent months, the program has kicked out far more homeowners than it has helped. It has completed only 346,000 modifications — though it initially set its sights on three million.
The top of the story is all bleakness. The bottom half of the story, though, is dedicated to two recent efforts: The $1.5 billion Hardest Hit Fund; and Massachusetts Rep. Barney Frank’s $3 billion program to provide unemployed homeowners with low-interest loans up to $50,000, funded through the Troubled Asset Relief Program, to help them pay their mortgages for two years or until they find jobs.
It’s a story that underlines again fundamental questions about the government’s power and responsibility to influence economic realities that vitally matter to the citizens of the country every day.