A $2 billion lifeline from the Treasury Department, to come out resources from the $700 billion Wall Street bailout, will go toward the existing Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund). The Department of Housing and Urban Development is putting forward an additional $1 billion in homeowner assistance through its newly created Emergency Homeowners Loan Program (“Jobless Homeowners to Get $3 Billion in Aid,” Chicago Tribune, Aug. 11, 2010).

Hardest Hit Fund

The Hardest Hit Fund, which was created by the Obama administration in February, initially provided $1.5 billion in aid to help the five states with the highest unemployment rates and largest declines in home values obtain federal aid and provide services such as mortgage payment subsidies and mortgage loan modifications. The fund was expanded in March with $600 million in aid for five more states.

Now, for the program’s second expansion, an additional $2 billion will be provided to assist 17 more states — Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Tennessee — along with the District of Columbia.

Emergency Homeowners Loan Program

The new HUD program, the Emergency Homeowners Loan Program, will get $1 billion to provide interest-free emergency “bridge loans” to struggling homeowners who are at risk of foreclosure due to involuntary unemployment, underemployment, or a medical condition. These loans will provide distressed homeowners with as much as $50,000 a year for up to two years.

To be eligible for the Emergency Homeowners Loan Program, homeowners must be at least three months delinquent on their mortgage payments — but considered likely to be able to resume repaying their mortgage within two years — and must show a good repayment record prior to the event that resulted in their reduced income. The bridge loans can be used to help pay mortgage principal, interest, mortgage insurance, taxes, and hazard insurance.

HUD will announce program specifics and additional details when the loan program is officially launched in the coming weeks.

Critics Question Effectiveness of Mortgage Debt Relief Initiatives

These two mortgage relief programs “will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the administration’s efforts to stabilize housing markets and communities across the country,” Bill Apgar, HUD senior adviser for mortgage finance, said in a statement.

Critics of the aid package, however, are not convinced.

Given the grim housing forecast, “it’s a drop in the bucket,” said Campbell Harvey, a professor of international business at Duke University.

“It will certainly help the people that actually get the loan. But in terms of the overall situation, it’s so small that it’s not going to have an economy-wide impact, and that’s the sort of thing people are looking for,” Harvey said.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

“This company was run by people who lied, bullied, and preyed on vulnerable Americans struggling to resolve their financial situation,” Cuomo said. “Pretending to be a police officer, threatening to throw consumers in jail — these practices are despicable as they are illegal.”

Operating under the name Final Claims Asset Locators, among several other names, the debt collection agency had its collectors pose as law enforcement officials who told debtors they were being arrested.

In a recorded conversation, a debt collector even told a debtor, “Make sure you have somewhere for your kids to go. Lock up your house. Get some clean clothes, because you’re not coming home anytime soon.”

The debt collection agency was owned by a former drug dealer and convicted felon Tobias Boyland, who also went by the name “Bags of Money” and who served 13 years for armed robbery. Boyland was arrested this week on a weapons charge after authorities found him carrying a loaded, unlicensed pistol and after finding an AK-47 rifle and $34,000 in cash in his house.

Boyland also owns a modeling agency, has released a rap album, has written a self-help book called “Thug Motivation,” and has advertised his business on a billboard using an image of himself in a gladiator outfit.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

401(k) plans allow workers to defer taxes on part of their income and invest that money in stock and bond mutual funds. Large companies like the ones surveyed by Charles Schwab, ranging in revenues from $100 million to more than $10 million, often match employees’ 401(k) investment contributions.

The constricted economy, however, has forced 23 percent of companies to stop offering 401(k) match opportunities, although many of the companies say this move will be temporary.

“They don’t see that as a long-term approach,” said Steve Anderson, head of Retirement Plan Services at Charles Schwab.

Workers with 401(k) plans, whose savings have taken a huge hit recently, typically pay close attention to their company’s matching program. In fact, 87 percent of employees polled identified 401(k) match as the most important feature of their company’s 401(k) plan. The second most important feature was access to advice on 401(k) investing.

The online survey also found that a quarter of companies are no longer offering open enrollment for 401(k) savings plans, limiting enrollment to certain employees.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The Federal Reserve, the Obama administration, and Congress were all commended by IMF, the Washington-based lender that has helped rescue the economies of Pakistan and Iceland, for their efforts to salvage the economy with a “well-targeted” stimulus package.

In fact, the report showed that the stimulus package will raise the gross domestic product, the value of goods and services produced in the United States, by 1 percent this year and by 0.25 percent in 2010, pointing to the likelihood of a “gradual” recovery.

Despite the IMF predicting a solid upturn in the economy in the next year, it still sees the U.S. unemployment rate topping 10 percent next year and sees a successful exit plan from the financial rescue programs as essential to the country’s recovery.

“The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010,” the staff review of the IMF report stated.

The IMF projects that public debt will nearly double from 2009 to 2011 to 75 percent of the gross domestic product, putting significant pressure on the Treasury bond rates, which are currently low, making it easier for prospective homebuyers to get low mortgage rates.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The section of the U.S. bankruptcy code in question was ruled to be in violation of the First Amendment by the U.S. appeals court in St. Louis in 2007 because the law “prevented lawyers from fulfilling their duty to clients to give them appropriate and beneficial financial advice.”

The court ruled that the law was passed as an attempt by Congress to stem lawyers’ abuse of the bankruptcy system but that language was too broad.

In fact, the court said, some clients might even benefit from their lawyers’ freedom to advise taking on certain types of debt, including a mortgage refinance, which can free up funds to help a consumer pay off other debt before filing for bankruptcy.

The language “would include advice constituting prudent pre-bankruptcy planning that is not an attempt to circumvent, abuse, or undermine the bankruptcy laws,” the court wrote (“U.S. Top Court to Decide Bankruptcy Advice Case,” Reuters, June 8, 2009).

In the Supreme Court case, which will be heard in October, the Obama administration is expected to argue that this provision of the Act can be viewed narrowly enough to allow debt relief agencies to advise their clients in anyway they see fit.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Credit Solutions of America, based in Richardson, Texas, advertised that it could cut consumers’ credit card payments in half, reduce their other monthly bills, and get them out of debt within three years, Koster says. But although the company collected hefty fees from consumers with the promise of delivering those debt reduction results, Koster charges that Credit Solutions of America never provided the advertised debt relief services, leaving its customers in a worse financial situation than before.

According to the Attorney General, Credit Solutions of America charged its customers fees that amounted to about 15 percent of their total debt, collecting those fees through an initial upfront payment and then through subsequent installment payments that it took directly from customers’ bank accounts.

The state of Missouri prohibits companies from collecting fees for credit services prior to the services being performed in full. Moreover, says Koster, the company wasn’t even legally registered to do business in the state.

“Credit Solutions of America promised real relief to consumers who were in financial straits because of high credit card debt,” Koster said. “We will continue to aggressively pursue the unacceptable business practices of these companies that offer false promises and deliver only harm.”

Get debt relief information from a trustworthy debt relief company

.

Related posts:

1. Mortgage Debt Relief: Homeowners at Risk of Foreclosure to Get $3 Billion in Federal Aid The federa

Related posts brought to you by Yet Another Related Posts Plugin.

The Federal Reserve reported last week that revolving credit — which is made up almost entirely of consumer credit card debt — fell by $8.6 billion in April, an annualized rate of 11 percent (“Fed: Credit Card, All Consumer Spending Declines,” CreditCards.com, June 5, 2009).

This is the seventh straight month of declines in revolving credit since October 2008 and the longest pullback in revolving credit balances on record since the Federal Reserve began reporting on consumer credit in 1968.

“The trend is certainly toward having less revolving consumer credit outstanding,” said Cynthia Ullrich, senior director at Fitch Ratings in New York.

Overall consumer debt, which also includes nonrevolving debt like auto loans and student loans,, dropped by a total of $15.7 billion in April, for an annualized rate of 7.4 percent — the second largest contraction in consumer debt in history (“Consumer Debt Plunges by $15.7 Billion in April,” MarketWatch, June 5, 2009).

Consumer debt has decreased by $43 billion in just the last three months, after jumping by $131 billion in 2007.

Find information on debt relief and other debt management options at ThinkDebtRelief.com

.

Related posts:

1. Mortgage Debt Relief: Homeowners at Risk of Foreclosure to Get $3 Billion in Federal Aid The federa

Related posts brought to you by Yet Another Related Posts Plugin.

This drop in the average credit score occurred at the same time that the state saw some of the highest delinquency rates nationwide on credit cards, mortgages, and auto loans.

In fact, Nevada had the country’s highest credit card delinquency rate, the second highest 60-day mortgage delinquency rate, and the eighth-highest delinquency rate for auto loans, according to TransUnion, one of the three major credit bureaus.

TransUnion’s director of consumer education, Steven Katz, said that given the state’s delinquency-rate trifecta, it’s not surprising that Nevadans’ credit scores are dropping.

“No. 1, you had people paying late,” he said. “No. 2, you had people applying for a lot of credit cards to pay their bill. And while all that is happening, the balance on all their accounts kept going up and up. All those things will pull down your score.”

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

This shift away from job-cutting could be a sign that the nation’s 8.9 percent unemployment rate — the highest in 25 years — may be starting to level out, reports the Baltimore Business Journal (“Survey: More Employers Trimming, Freezing Salaries,” June 1, 2009).

The percentage of employers that have cut or frozen employee salaries has nearly doubled since the first month of 2009, from 27 to 52 percent, according to the most recent employer survey conducted by outplacement consultancy firm Challenger, Gray & Christmas.

Largely in response to a weakened economy, 86 percent of the companies surveyed in May said they reduced costs by freezing or cutting salaries, which represents a small decline from the 92 percent of companies who indicated in January that they’d implemented similar cost-cutting measures.

To cut costs, employers have also shortened employee work hours, imposed furloughs, eliminated tuition reimbursement programs, and made temporary layoffs.

John Challenger, CEO of Challenger, Gray & Christmas, suggests that temporary layoffs are a better cost-cutting solution for employers in the long-run than permanently eliminating positions.

“It is a lot easier to restore compensation and benefits,” he said, “than it is to rehire and retrain workers when the economy improves.”

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The modifications, completed between December 2008 and March 2009, were part of an agreement with state attorneys general in California and Florida, among other states, over charges of predatory lending against Countrywide Financial Corp., which Bank of America acquired in July of last year.

The charges against Countrywide came in October after Bank of America had already taken over the country’s formerly largest home lender, resulting in a settlement that could ultimately end up saving almost 400,000 homeowners as much as $8.4 billion.

The settlement targeted subprime loans — typically offered to homeowners with the weakest credit — and adjustable rate mortgages, which allowed homeowners to make interest-only payments and defer payments on their loan’s principal balance.

Investors, who own 88 percent of the loans that may be eligible for modification under the settlement and who are wary of huge potential losses that may result from these mortgage modifications, are suing Bank of America in U.S. District Court in New York over who should pay for the modifications.

Related posts:

1. Mortgage Debt Relief: Homeowners at Risk of Foreclosure to Get $3 Billion in Federal Aid The federa

Related posts brought to you by Yet Another Related Posts Plugin.