Bailout funds paying mortgages

Written by Chris Otts The Courier-Journal
Ky., Ind. able to help some stay in homes

Pamela Williams says a Kentucky program that’s paying her $1,058 monthly mortgage is staving off foreclosure on her eastern Jefferson County home. / Kylene Lloyd/The C-J

She has lost two sales and marketing jobs in the past three years, exhausted 99 weeks of unemployment benefits and liquidated her 401(k) retirement account.
To help pay bills and condo association fees, she raised a few hundred dollars by pawning the diamond engagement ring her late fiancee had given her.
Now working again, but at about half her former pay, 58-year-old Pamela Williams is having her mortgage paid by a new government program that she says is the only thing keeping Bank of America from foreclosing on her eastern Jefferson County patio home.
“It’s been a godsend,” she said. “It’s helping me maintain my sanity until I can get back on my feet and make a decision as to what I am going to do.”
Using unspent money from the 2008 federal bank bailout, Kentucky is sending $1,058 a month to Bank of America to cover Williams’ mortgage payment. The state has also paid $7,500 to the bank to make up for past-due payments, late fees and foreclosure-related charges.
Kentucky and Indiana are among 18 states sharing $7.6 billion from the “Hardest Hit Fund,” an Obama administration program that targets states with high unemployment rates or sharply depressed housing prices.
Qualified Kentuckians can get up to $25,000 from the program.
Hoosiers can get up to $12,000 or $18,000, depending on the county in which they live. In Southern Indiana, residents of Crawford, Orange and Scott counties can get $18,000, while residents of Floyd, Clark, Harrison and Washington counties can get $12,000.
'New territory'
Since launching their programs last spring, each state has plenty of money remaining. As of Sept. 30, Kentucky has approved 682 homeowners for the effort, called the Unemployment Bridge Program. Only about 10 percent of the program’s $134 million is spoken for.
Indiana had approved only 53 homeowners at the end of September for its program, called Building the Bridge to Recovery. That represents less than $1 million of $183 million available, but state officials say approvals spiked in October after they relaxed some rules.
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