Included in the Wall Street reform legislation finally passed by Congress was a bill authored by U.S. Rep. Chaka Fattah (D., Pa.) that will create an emergency mortgage relief program.
Fattah deserves kudos for successfully steering the measure that will help eligible homeowners who have lost their jobs avoid foreclosure. With the country still trying to escape the grips of recession, that type of assistance is an important tool for recovery.
The program makes more than $1 billion in TARP funds available to families about to lose their homes. Homeowners may borrow up to $50,000, provided they can show they have a reasonable prospect of resuming mortgage payments within 24 months.
Administered by the Department of Housing and Urban Development, the federal project will be patterned after Pennsylvania’s Homeowners Emergency Mortgage Assistance Program, which has provided 41,500 homeowners with $433 million in assistance since 1984.
Yes, Fattah authored that legislation, too, when he was a House member in the state’s General Assembly. Nearly 90 percent of the participants in the Pennsylvania program have avoided foreclosure, and almost half, 19,700, have repaid their loans in full.
This is the type of bailout that produces tangible results that are easy to see. Until the unemployment rate drops significantly, programs that similarly help families make it through tight periods are worth the cost. They need a chance to get back on their feet.