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“Bridge Loans” allow quicker relief for homeowners who are both unemployed and “underwater.”
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Foreclosures in October topped 300,000 nationwide, the eighth month in a row that amount has been breached.
Treasury Secretary Geithner reminded Congress last week that the Administration’s mortgage modification efforts have helped over 600,000 homeowners avoid foreclosure, accounting for nearly half of the total number of homeowners eligible for these programs.
However, millions of homeowners whose only “mistake” was losing their jobs, through no fault of their own, are still at risk of losing their homes. Recently, the Wall Street Journal reported that 10.7 million Americans, 23 percent of homeowners nationally, have negative equity in their homes.
“I encourage you, Secretary Geithner, and the President to consider alternative policy initiatives that provide relief to homeowners who are ineligible for current modification programs,” the letter from Congressman Cummings reads, in part. “As I have mentioned before, the bridge loan concept presents an opportunity to provide immediate targeted relief to this constituency. Whether through grants or loans, the funding goes to the borrower (or the mortgage company directly), providing immediate relief against a pending delinquency or default.”
The letter also notes that Congressman Cummings, Congressmen Barney Frank and Chaka Fattah, as well as Senator Jack Reed, have introduced legislation in Congress to enable and implement different variations of the bridge loan concept.
Both Maryland and Pennsylvania have both implemented similar temporary low interest loan programs to keep their citizens in their homes - the Maryland Bridge to Hope Program and Pennsylvania Homeowners’ Emergency Mortgage Assistance Program.
