UnemployedKyle and Desiree Bates face a financial double whammy. Kyle, 39, is on long-term disability to recover from brain surgery that resulted from hydrocephalus, or water on the brain. Desiree is struggling to find a job, and the income from her small cake-baking business is not nearly enough the couple and their three children.

But their $1,100 monthly mortgage bill keeps coming, along with medical expenses. With help from extended family, they have fended off foreclosure on their Fort Worth, Tex., home, and are down from four months to two months on late payments.

Last Tuesday, they reached out for a lifeline. Their mortgage lender encouraged them to work with the Business and Community Lenders of Texas to complete an application for an interest-free loan of up to $50,000, made available though a new program, the Emergency Homeowners' Loan Program or EHLP. The $1 billion program is available to distressed homeowners in 32 states and is the latest government initiative from the Department of Housing and Urban Development and NeighborWorks. It is the first program to specifically target those who are unemployed or who have had medical emergencies.

View more videos at nbcdfw.com.

The high unemployment rate, which edged upward to 9.2% in June and is now at its highest level since last December, continues to deeply affect where and how millions of Americans live. To create more relief for unemployed homeowners, the Obama administration announced on Thursday that the Federal Housing Administration will require mortgage servicers to extend forbearance for another year to borrowers with FHA-insured loans. Servicers who are part of Making Home Affordable will also be required to extend the forbearance for another year for unemployed homeowners.

But it may be too little, too late. Families represent a much larger share of the homeless in the shelter system than ever before, according to HUD's 2010 Annual Homeless Assessment Report to Congress, which was released in June. Between 2007 and 2010, the number of homeless persons in families increased by 20%. The majority of homeless families consist of a single mother with young children.

'A Vicious Cycle'

Take the example of San Diego, where the local unemployment rate is slightly above the national average. It's not getting better there, either: More than 1,400 teachers and other educational staff had their last day of work this month, following deep public budget cuts.
Juan Del Rio, program director at Neighborhood House Association in San Diego, says the need for help for unemployed homeowners is not abating. "It's a vicious cycle," he says. "It's not overwhelming yet, but it's getting there."

In addition to working directly with a lender, housing organizations like Del Rio's are typically the first line of defense for unemployed homeowners.

"If you work with a nonprofit, you are more likely to get a mortgage modification," says Douglas Robinson, a spokesperson for NeighborWorks.

Del Rio advises distressed homeowners to immediately ask their lender for a loan modification or forbearance, or apply for assistance when they know unemployment is imminent. Modifications can take months: "By doing it early, the odds are in your favor versus waiting and passing the threshold" for getting aid from a government program.

HUD launched EHLP on June 20, and homeowners have until July 22 to apply for the the program. The government agency hopes to provide funds for up to 30,000 people. Homeowners in states not covered by EHLP or similar programs -- and that includes California -- can apply for assistance through the Hardest Hit Fund, which has allocated $7 billion to states for housing-related aid.

Del Rio says doubling up with family and roommates, or creating a rental situation in part of the home can also add another source of income or defray costs.

"There is only so much you can do," acknowledges Del Rio. "People here have been unemployed for six months to a year." Transitioning out of the home with a short sale or even bankruptcy are scenarios that can prevent foreclosure. While housing organizations can surface a number of alternatives to try and sustain payments, the goal is prevent foreclosure and "try to keep credit as much intact as much as possible."

Renters Face Swift Consequences

While the thrust of government efforts has been to help out-of-work homeowners, renters can be in an even more precarious position when they lose their jobs. The consequences are swift. Landlords don't typically negotiate with tenants, and even one month of delinquency can start the eviction process. Compounding the issue is that renters generally tend to be in lower income brackets and have slender safety nets.
"A great concern is the lack of coordinated response, because renters are a huge community and they have a limited amount of time," says Geraldine Doetzer, an attorney with the National Law Center on Homelessness & Poverty. "It points to the problem of a sheer lack of affordable rental housing. That has been a reality for many decades and is coming into sharp focus now."

RentAssistance.us is grassroots resource for people who need help. Zack Preble founded it on a volunteer basis several years ago to consolidate information from government, nonprofit and private agencies that provide rental help. Traffic has continued to grow steadily, with an average of more than 100,000 unique views a month.

"The amount of emails from people who need help are overwhelming. For every one success I hear about, there are 20 to 30 emails [from people] who are about to lose their home and be on the street," he says. Most users, he says, come from California, followed by Florida, Texas and Illinois.

Trying the Best They Can

The Bates family will know by mid-August if their loan request has been approved; the government aid program is scheduled to initiate payments with lenders in September. "We keep the lights turned off and conserve electricity," Desiree says about the family's efforts to cost cuts. Meanwhile, she's baking cakes as fast as she can to makes ends meet.

"Everybody is really into piña colada [cake]," she says. With high spirits belying their grim financial situation, Kyle says, "It tastes awesome."

If you are unemployed and at risk of losing your home, visit HUD website for housing assistance and local resources. If you are at risk for homelessness, call 211 for information and referral services, or contact the United Way or the Salvation Army for additional help and information.

Catherine New is a staff writer with DailyFinance.com. You can reach her here.

Increase your money and finance knowledge from home

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Reverse mortgages are currently one of the best ways for seniors to get the equity out of their homes without having to move or worry about foreclosures .

November 28 2013 at 1:59 AM Report abuse rate up rate down Reply

this guys if the biggest ******* idiot ive ever heard. they dont even count you for unemployment if you dont receive benefits. or if your benefits have run out.. you are NOT counted in the unemployment rate. and he says there is a spike of people getting jobs within three weeks of them losing benefits... OF COURSE.. IF YOU ARENT GOING TO GET UNEMPLOYMENT BENEFITS.. FOR WHICH YOU PAID MONIES INTO.. YOU'LL TAKE ANY JOB OUT THERE. Case in point.. my sister made 18.00 an hour.. she got laid off. she could barely live on the 300 a week from unemployement when she was making three times that b4.. she looked for a job and there is nothing out there.. and yes when her unemployment ran out she had to take a cashier job at a gas station making minimum wage.. which means she makes 290.00 a week.. or 75% less than what she made b4.. its these FREAKING ITIOT politicians and morons like this guy that are fuc*ing this country up.

July 27 2011 at 2:58 PM Report abuse +1 rate up rate down Reply

I'm starting a podcast along these same lines called Tales of the Great Recession to share peoples stories of long term joblessness, from the struggle of a long search to the joy of finding a job, and what you learned in-between. Please send your stories to talesofthegr@aol.com. The first podcast will be available free through itunes on 7/22, and I plan on doing it as a weekly podcast for as long as the stories keep coming in.

July 16 2011 at 12:57 AM Report abuse rate up rate down Reply

Why is there no help for renters who lose their jobs? (For example, me.) I think helping only a certain segment of the population while not assisting the rest is against the constitution. In my case, I'm stuck with a high rent apartment. I can't move to a cheaper place, because I have no income so no one will rent to me. I can't buy, that's for sure.

I'm not the only one in this situation. There are millions of renters who are also out of a job, but none of us is going to get help at all from the government.

I say, help everyone, or help no one.

July 14 2011 at 5:13 PM Report abuse +1 rate up rate down Reply

If there was such a thing of a guarantee of cheap energy, and not a market of energy following up with growth, people will open their wallets again. Yes, its that simple. Many more are aware what energy is doing to the price of everything. It is dragging us down, and decimating the once known way of life for the middle class, and it is not just vacations. Energy, no matter what type in this so fragile economy need to be controlled, and regulated as the front issue.

July 12 2011 at 9:03 AM Report abuse rate up rate down Reply

FREE Oil Trading Room: The time has come for me personally to demonstrate the secret code for FREE twice per month in REAL TIME inside my online trading room. I will show that I know which direction oil is going to go over and over and over again without end. FBI, Secret Service, Judges, Lawyers, Doctors, Media, Traders, you are all invited to watch a scientist demonstrate how the oil market trades via a computer program.
Google "Oil Trading Academy"

July 11 2011 at 10:54 PM Report abuse +1 rate up rate down Reply

Uh Joe ..yes Obama ? Joe what state do I need the most votes ? Uh all 57 states ...No Joe just name one .....Ok how about Wyoming " Thanks Joe I can use that in my speech...How does this sound > I never said it would be easy ..........Spare change is never easy ...Whoops I meant Change is Never easy ....But Look beyond the great Horizon and just know that although you lost your JObs and Your Homes that I can relate to you while Michelle and I eat our lobster dinner .... In fact I worry about you and what means the most to YOU , I stay up at night and I read letters from people likeYOU ! ...... I just read a letter from Jane in the GREAT STATE of WYOMING ... Jane is a single mom and can not pay the bills , she worrys how she will feed her kids and although I have a Billion dollars for my campaigning Jane knows I wont pay for her life saving operation or feed her kids ...OOPs I meant Jane knows that beyond the vast emptyness that their is Hope " that CHANGE will come , But hope wont come unless you elect me again ...OOps I meant Uh ...... Where was I ?

July 11 2011 at 12:27 AM Report abuse +1 rate up rate down Reply

I have a 3 letter word for you " JOBS " <<<

July 11 2011 at 12:15 AM Report abuse +2 rate up rate down Reply
1 reply to theteleprompter's comment

Sorry I missed you teleprompter.

July 11 2011 at 9:31 PM Report abuse rate up rate down Reply

Jose are you going to let the ENEMY win by not taking their american jobs ....OOPs I meant by not going to the polls ....Uh ......maybe I should have said opponents instead of the enemy " where was I ..Oh yes I need your votes . Because not many of the Enemy I meant americans plan to vote for me this campaign so I rely upon you and the cemetary ....OOps I meant the dearly departed that voted for me . Uh I can offer you a Drivers lic. and uh FREE goverment checks . let me know Best Regards Commander & Thief washington DC

July 11 2011 at 12:14 AM Report abuse +2 rate up rate down Reply

Uh ....Look This is how we are going to do this . Everyone will just have to take turns . Now the first group of Unemployed will not be counted by the labor dept .after their extended unemployment checks run out , there for the unemployment count will go down . Then the next group comes and we just keep doing this until the labor dept . says that Nobody is on Unemployment , Just in time for my 2012 election . Uh ..how does this sound for my new speech > .I was able to create 20,000 jobs and at the very same time handed out 500,0000 PInk slips .....I am a community organizer ..I meant I am president you know .......

July 11 2011 at 12:09 AM Report abuse +1 rate up rate down Reply