You may qualify for a Refinance Loan under this program if: (If is the operative word)
· Your loan is owned or guaranteed by Fannie Mae or Freddie Mac
· You’re current on your mortgage payments
· You can demonstrate you can afford the lower payments
· You don’t owe more than 105% of your home’s estimated value

Oh wait, “you can demonstrate you can afford the lower payments?” Given the fact that the unemployment rate in several counties in California alone has topped 20%, the Fannie Mae Refi PlusTM Program might prove to be pointless.

WASHINGTON, DC — Today, the Obama Administration released the next steps in the recently-announced Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (“HFA Hardest-Hit Fund”).

On February 19, 2010, President Obama announced additional funding for innovative measures to help families in the states that have been hit the hardest by the aftermath of the burst of the housing bubble. States where house prices have fallen more than 20% from their peak are eligible for this funding. Those states are Nevada, California, Florida, Arizona and Michigan. The HFA Hardest-Hit Fund will help housing finance agencies (“HFAs”) in these states further respond to the most pressing problems in their communities. HFAs have an understanding of the most urgent local challenges and an ability to address them expeditiously. For that reason, the Obama Administration has committed $1.5 billion in funding under the Emergency Economic Stabilization Act of 2008 (“EESA”) to help HFAs expand their assistance to struggling homeowners and innovate new ways to address housing challenges.

Today the Administration released detailed guidance for eligible HFAs to submit program proposals for funding. The HFA Hardest-Hit Fund is designed to allow the maximum possible flexibility to eligible HFAs in designing programs that are tailored to the needs of their state. Today’s guidance provides instruction to HFAs to ensure that program proposals meet basic guidelines and comply with the purposes of EESA. All programs must protect home values, preserve homeownership, promote jobs and economic growth, and provide accountability to the public.

Funding allocations were also released today based on a formula to provide relief in direct proportion to the scale of each state’s housing challenges. Funds have been allocated based on home price declines, unemployment rates, and mortgage delinquencies.

Eligible HFAs may submit program proposals to the Department of the Treasury up to the April 16th deadline, after which the review period will begin. Treasury will provide additional updates to the public as the program progresses.

This is all well and good for the person who can qualify, but here in bankrupt California, we are “still” dealing with a very serious unemployment rate. In fact, according to the Los Angeles times, the unemployment rate became even higher in January, indicating that we are not out of trouble yet, and the so-called “economic recovery” has not loosed more jobs for this Golden State!

As a matter of fact, California joins with Florida, North Carolina, South Carolina and Georgia, reaching an unemployment crescendo since the government began keeping track in 1976, according to the Bureau of Labor Statistics. California’s was 12.5% in January, up from 12.3% in December.

According to Esmael Adibi, and economist at Chapman University in Orange, California he said, “The unemployment rate will be persistently at this high level for at least a few more months.”

With the latest stats, California is showing a slower recovery, and economists now believe that it is going to take longer to recover from this economic crisis than previously thought.

Adibi said, “The impact on the labor market was much more severe than what we had estimated,” and frankly, this should come as no surprise to those who have lost their jobs, their homes, and become financially compromised here in the Golden State.

Many counties in California are still suffering from the unemployment rate, with some counties like Merced rising to 21.7%, so what is this going to do for those who own homes?

“The real mystery now is why we aren’t getting job growth when the GDP has been positive,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.

Levy further claims that the budget issues in California are only going to drag down the state’s recovery. Levy said, “Even if they don’t get pink slips, state employees are earning less money because of furloughs and salary reductions, which reduces consumer spending in the state.”

One cannot help but wonder where all of this is leading? The long-term effects of this economic crisis is not painting a pretty picture for many in California and other states that have been hard-hit.

Read More:

http://makinghomeaffordable.gov/pr_03052010.html