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.
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.
Extending unemployment insurance during the recession didn’t just give the unemployed some extra income, but actually prevented millions from being foreclosed on, according to a new study from Joanne W. Hsu, David A. Matsa, and Brian T. Melzer. Given that different states have different amounts they’ll pay out in unemployment benefits — in 2011 it … Continue reading
http://www.youtube.com/watch?v=-eU3QqvD_50 Long-term unemployment in the U.S. is twice as high as it was before the financial crisis. That\’s according to the Center on Budget and Policy Priorities. Yet Congress did not extend unemployment benefits in the latest budget deal. Less well known is how the U.S. has one of the least generous unemployment insurance systems … Continue reading