Friday, March 26, 2010

Aid to Homeowners Coming?

In today's NY Times, unemployment claims "fell more than expected."

Except they really didn't. It's all part of the numbers guessing shell game:

The Labor Department said first-time claims dropped by 14,000 to a seasonally adjusted 442,000. That was below analysts’ estimate of 450,000, according to Thomson Reuters.

But most of the drop resulted from a change in the calculations the department makes to seasonally adjust the data, a Labor Department analyst said. Excluding the effect of the adjustments, claims would have fallen by 4,000.

Later in the article:

The number of people continuing to claim unemployment benefits, meanwhile, fell to 4.6 million.

But that does not include millions of people who are receiving extended benefits for up to 73 extra weeks, paid for by the federal government, on top of the 26 customarily provided by the states. Nearly 5.7 million people were on the extended benefit rolls for the week ended March 6, the latest data available. That is about 300,000 lower than the previous week. The extended benefit figures aren’t seasonally adjusted and are volatile from week to week.

All told, more than 11.1 million people are claiming unemployment benefits, the department said.

And as always, this doesn't include the numbers of those still unemployed who have used up their benefits and those who were never eligible.

However - it sounds as though good news is coming for troubled homeowners.
From the NY Times

The Obama administration on Friday will announce broad new initiatives to help troubled homeowners, potentially refinancing several million of them into fresh government-backed mortgages with lower payments.

Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.

The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.

This could be real help for those homeowners who are unemployed or underemployed and barely hanging on. Stay tuned.

cross posted at

1 comment:

DissedBelief said...

One of my jobs is a local hospitality establishment. Many guests when checking out rummage through countless credit cards until they "find one" that isn't rejected. They can then pay their bill. Why are they vacationing? They still haven't learned their lesson and their IQ remains at 0!Those of us who don't own
2nd homes, vacation once every 8 years or so and live within our mains continue to pay the price for idiots. I've met many individuals locally, right here in the valley, who purchased more than one home on "speculation" and made the decision to go bankcrupt because their mortgages went upside down and they ended up in the hole. We are all paying for them. Thanks for nothing. I still want to meet the individual who purchased a small home to live in (not for speculation) and was defrauded by the mortgage company.

When I purchased back in 2000 I was a "bad risk" because I had little credit due to living a life of paying cash or paying off in full my credit balance each month. The mortgage company made me get letters of recommendation from individuals such as landlords, dentists and employers. The representative from this company (GMAC) told me at the closing table "they'll give anyone a mortgage". I eventually paid off my mortgage before selling. Mortgage companies now will NOT give a mortgage to anyone who has no credit at all. Period. So instead of swinging the pendulum into middle ground, it has now swung fanatically to the other side, discounting any and all individuals with little or no credit as bad risks. There isn't any common sense practised at all, and individuals who wanted but not needed McMansions have helped place us in the black hole we are in today. That, and the on going war machine. Hyperinflation may be around the corner, in which case, we are seriously doomed.