Three or so years into the recession, there is an increasing number of people in mortgage default who used to be part of the middle class. House owners who have savings can hold out longer through their periods of unemployment or underemployment. By cutting back on expenses and draining their savings, they pay their mortgages. Eventually, those who did not get reemployed at their previous level fell into default, as their savings drained down too far to hold on.
Early in the foreclosure wave, people who bought farther beyond their ability to repay and developers who were over-extended fell hard and fell early. Those no-longer-allowed mortgages -- that were destined to fail as soon as real estate appreciation stopped -- lead to the first wave of mortgage defaults. Massachusetts saw these early defaults.
The foreclosures and distressed sales now in Massachusetts are part of the second wave. The middle-class wave. The unemployment wave. According to Jeffrey Chubb, in Massachusetts and Boston metro area it is a wave, not a tsunami. Massachusetts, and especially metro Boston, remains below the national average.
But, for unemployed or underemployed house owners, it doesn’t matter how many there are. It matters that they are just hanging on. If you know someone who is hanging on, July 22 is an important deadline for them.
Three weeks ago, the Obama Administration launched the Emergency Homeowners’ Loan Program (EHLP) http://www.nw.org/ehlp to provide mortgage relief to homeowners who are unemployed or underemployed and at risk of foreclosure. It is estimated that 1,250 Commonwealth homeowners will be able to be assisted by this program. Eligible homeowners must apply to EHLP counseling agencies by July 22, 2011. If you or someone you know could benefit from this program, please watch this video by Lt. Governor Tim Murray and Undersecretary Tina Brooks. To find the relevant local agency for the program guidelines and more information contact CHAPA. Nationally, here is the list, by state, of agencies that are taking applications for the program.
Do you know someone who might benefit from this program? National unemployment is hovering around 9 percent. In Massachusetts, it is just a bit lower, hovering around 7.5 percent. Do you know someone who is one of the seven or eight out of every one-hundred people who has been out of work? Are they having problems paying their mortgage (or their rent?)
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