Dublin, CA to Get One-year Break in Mortgage Payment from President Obama
U.S. Housing Secretary Shaun Donovan recently announced that the Federal Housing Administration (FHA) will be changing guidelines to give 30,000 qualified homeowners the option to miss up to one year of mortgage payments while they look for a new job. This policy change may just be the lifeline some homeowners in Dublin, CA need to get back on their feet. Applicable only to FHA-backed home loans, the $1B mortgage holiday program will assist homeowners who have experienced a reduction in income and are at risk of foreclosure due to involuntary unemployment or underemployment starting August 1st.
According to Housing Secretary Donovan, for those without jobs, 60% have been unemployed for more than three months and 45% have been unemployed for more than six months. Given this dire set of statistics, President Barack Obama and his administration have to do something if they are serious about reducing the glut of distressed home mortgages. During a recent town hall meeting mediated by Twitter, President Obama admitted the housing market has “been most stubborn” challenge for his administration. He conceded that the government’s programs to help struggling homeowners were “not enough” and his administration has to go “back to the drawing board.”
With the recent launch of this $1B mortgage holiday program, President Obama hopes to prevent more homes from falling into foreclosure as the job market remains anemic. Many in and around Dublin have been unemployed and underemployed. Critics of President Obama across the political spectrum are not impressed. Some have accused the President of throwing good money we do not have after bad debt we will pass onto our children, while others see this new program as too little too late. Although this new mortgage payment holiday from the government was conceived with good intentions, the program may also come with a few unintended consequences.
Formalizing the 12-month forbearance could create a disincentive for the unemployed to seek work actively. Similar criticisms have been used by some against extending unemployment benefits to nearly two years. In addition, some studies on long-term unemployment have shown that once a person has been unemployed for more than six months, the probability of that person’s returning to the workforce drops to just 50%. In light of those numbers, extending the forbearance period from the current four months to one year may simply be delaying the inevitable. Tea Partiers may also see the new program as a way for liberals to increase people’s reliance on the federal government.
While the arguments against this government-sponsored lifeline have merit, the impact it will have on many unemployed homeowners who are trying to make ends meet is undeniable. A growing number of homeowners in and around Dublin have already implemented their own forbearance program by not making their mortgage payments because they know the banks are loathe to foreclose on properties in an area crowded with distressed properties. The one-year break from mortgage payment President Obama will give to qualified homeowners starting August 1st simply formalizes what many have already been doing, as the government pumps $1B into the financial services industry.
12:34 PM on July 14th, 2011
Why is this article titled as it is? Obama had little to do with this decision. The FHA as an organization worked this program out. Why give credit directly to Obama. This seems to me to be an transparent and blatant attempt to make Obama look good and is an example of media attempting to influence public opinion of elected officials, specifically President Obama.
4:25 PM on July 14th, 2011
I agreed to your opinion, I voted on Obama. Now I am having a second thought of his performance. It does not help after many years of depressing property value. Regardless, this program seems to me to support the up coming election. It is already too late. Lots of property have gone into forclosed and nothing is helping. Glad that I still have my job while looking for a second job. Most of the programs are not helping responsible people like me. I literally can forclose on my property and be debt free, but choose not to do that. I don’t want to make a conclusion that our current administration is failing. In fact, I am already half way convinced.
4:45 PM on July 14th, 2011
Hi Maurice – the sitting President is directly responsible for the programs and performance of the Federal government. This website does not have a political bias. If you look at the articles that we’ve published, you will clearly see that we are politically neutral and focus exclusively on the merits of the issues at hand.
Thx, John Z.
11:48 AM on July 19th, 2011
John, Thank you for your response.
Allow me to suggest that a better title for the article would have been “Dublin, CA to Get One-year Break in Mortgage Payment from the Obama Administration”.
I still believe the use of the phrase “President Obama” gives the impression that President Obama himself arranged for Dublin residents to receive this benefit.
I will admit I am not a fan of President Obama. I believe people in media attempt to mold opinions to their viewpoints by subtle, covert means, and I still believe your article’s title does exactly that.
8:39 PM on July 19th, 2011
Hi Maurice – your point is well taken.
As an aside, I have now been accused of being both a Democrat and a Republican. Truth be told, I’m not affiliated with any political party.
Cheers, John Z.
9:36 PM on July 19th, 2011
John is a Libertarian.
9:11 PM on July 15th, 2011
What about the non-FHA loans! When will our relief come?
9:08 PM on September 7th, 2011
Relief only comes if you do all the right things, live beyond your means, take out 3 or 4 mortgages in your house to buy pretty shiny things and then blame the government and banks for easy money. Drugs are easy too..the first few are usually on the house, to get you sucked in
If you saved, put 20% down on your home, did not buy an expensive car you really can not afford, you did the wrong things, so you get no relief, because you can afford it. t he cherry on the ice cream is that your tax dollars now have to bail out everyone else. Congrats, welcome to the new america. But I guess it’s better than a kick in the balls or a sharp stick in the eye.