The federal government seems to have a gift for establishing programs that are supposed to help distressed homeowners, but that don't actually work. For instance, the Department of the Treasury started a program last year to help homeowners who are unemployed prevent foreclosure of their homes. The program offers a suspension of mortgage payments for three months. Unfortunately, the average length of unemployment is now nine months. Only around 7,400 people are participating in the program, and participation is no guarantee of preventing an eventual foreclosure.

Why are the programs so unhelpful? One problem is that when the financial crisis first hit the country, the primary cause of foreclosures was subprime mortgages. Government programs were set up with that situation in mind. However, the primary cause of foreclosures in Fort Lauderdale and across the country today is unemployment.

Furthermore, with unemployment reaching more than 9 percent, foreclosures are likely to grow from this cause, and with no realistic program in place to prevent them.

Unemployed homeowners would welcome a more robust program, such as one that suspended mortgage payments long enough for a homeowner to get a new job.

Ft. Lauderdale foreclosure lawyers point out that the programs designed to help homeowners with subprime mortgages are set up to get the homeowner a mortgage modification. Even with new terms, however, the modified mortgages require a regular payment. Unemployed homeowners cannot qualify.

Critics also point out that as part of the bank bailout, the Treasury was given more than $45 billion to help prevent foreclosures. Only $1.85 billion of that has been put to use. In the meantime, more than a million and a half homes are expected to be foreclosed this year.

Source: NYT "For the Jobless, Little U.S. Help on Foreclosure" 6/5/2011