Main Street

Aid to Homeowners Coming?

In today’s NY Times, unemployment claims “fell more than expected.”

Except they really didn’t. It’s all part of the numbers guessing shell game:

The Labor Department said first-time claims dropped by 14,000 to a seasonally adjusted 442,000. That was below analysts’ estimate of 450,000, according to Thomson Reuters.

But most of the drop resulted from a change in the calculations the department makes to seasonally adjust the data, a Labor Department analyst said. Excluding the effect of the adjustments, claims would have fallen by 4,000.

Later in the article:

The number of people continuing to claim unemployment benefits, meanwhile, fell to 4.6 million.

But that does not include millions of people who are receiving extended benefits for up to 73 extra weeks, paid for by the federal government, on top of the 26 customarily provided by the states. Nearly 5.7 million people were on the extended benefit rolls for the week ended March 6, the latest data available. That is about 300,000 lower than the previous week. The extended benefit figures aren’t seasonally adjusted and are volatile from week to week.

All told, more than 11.1 million people are claiming unemployment benefits, the department said.

And as always, this doesn’t include the numbers of those still unemployed who have used up their benefits and those who were never eligible.

However – it sounds as though good news is coming for troubled homeowners.

From the NY Times:

The Obama administration on Friday will announce broad new initiatives to help troubled homeowners, potentially refinancing several million of them into fresh government-backed mortgages with lower payments.

Another element of the new program is meant to temporarily reduce the payments of borrowers who are unemployed and seeking a job. Additionally, the government will encourage lenders to write down the value of loans held by borrowers in modification programs.

The escalation in aid comes as the administration is under rising pressure from Congress to resolve the foreclosure crisis, which is straining the economy and putting millions of Americans at risk of losing their homes. But the new initiatives could well spur protests among those who have kept up their payments and are not in trouble.

This could be real help for those homeowners who are unemployed or underemployed and barely hanging on. Stay tuned.

Tags: mortgage crisis