More bad incentives for the unemployed

People are only eligible for new housing assistance benefits as long as they are unemployed. If you add it to the unemployment insurance benefits and the health insurance subsidy, you create an additional incentive to be unemployed. But the most glaring issue is that the money prevents people from doing sensible things such as renting out their house and moving into a smaller apartment. The housing aid is only available as long as one lives in the house.

The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation's toughest job markets.

The Treasury Department said Wednesday it will send $2 billion to 17 states that have unemployment rates higher than the national average for a year. They will use the money for programs to aid unemployed homeowners. Some of those states have already designed such programs.

Another $1 billion will go to a new program being run by the Department of Housing and Urban Development. It will provide homeowners with emergency zero-interest rate loans of up to $50,000 for up to two years.

The administration was required to launch the HUD emergency loan program by the financial regulatory bill signed by President Barack Obama last month. . . .

California will get the largest share of money for the Treasury program, at $476 million. Florida is in line for nearly $239 million. Illinois will receive $166 million and Ohio will receive $149 million.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration's main effort to assist those facing foreclosure.

That program, known as Making Home Affordable, provides lenders with incentives to reduce mortgage payments. So far, it has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009. . . .