Banks will get the biggest benefit from an Obama administration housing program designed to help unemployed homeowners escape foreclosure.
Housing experts expressed concern that banks, not homeowners, will be helped by the White House’s $3 billion funding infusion — $2 billion from the Treasury Department and another $1 billion from the Housing and Urban Development Department — going to those states hit hardest by the housing market crash and unemployment.
« Giving money to the banks isn’t what the government should be doing right now, » said Dean Baker, co-founder of the Center for Economic and Policy Research.
Foreclosures were up 4 percent in July with 325,229 filings, a nearly 10 percent increase over the same month in 2009, according to a report from RealtyTrac, a group that tracks foreclosure filings.
Under the federal program, Treasury will direct the $2 billion to the « Hardest Hit Fund » created earlier this year, while HUD will create a new « Emergency Homeowners Loan Program » that will provide zero-interest loans of up to $50,000 for two years.