An updated tally by Moody’s Analytics shows that 6.5 million homeowners have lost their homes in the housing bust so far. And for most of them, the proximate cause of foreclosure was unemployment. Losing a job meant losing the income to pay the mortgage, while depressed house values meant that struggling homeowners could not tap their equity to help cover their monthly expenses or sell at a price high enough to pay off their mortgage.
Many unemployed homeowners, however, managed to hang on. A new study explains how.
The study, undertaken by researchers at the Federal Reserve Board of Governors and Northwestern University and summarized here by the Times’s Lisa Prevost, found that from July 2008 through December 2012, $250 billion in federally funded unemployment benefits helped homeowners avoid an estimated 1.4 million foreclosures.
That eclipses the 800,000 foreclosures that were prevented as of 2013 by the government’s main anti-foreclosure program, Home Affordable Modification Program, or HAMP. At its outset in 2009, HAMP was touted as a way to help 4 million people avoid foreclosure, but the effort was doomed by its poor design and chaotic execution.
Chosen excerpts by Job Market Monitor. Read the whole story at How Unemployment Insurance Helps Prevent Foreclosures – NYTimes.com.
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