The U.S. Senate will try to pass another short-term extension of federal unemployment benefits this week. The one-month extension should allow the House and Senate enough time to iron out their differences on the $154 billion jobs bill the Senate passed earlier this month that extends federal unemployment benefits through the end of the year.
The five worst housing market states, California, Nevada, Michigan, Florida and Arizona are getting $1.5 billion in government help. The only catch is the states need to find "innovative" ways to spend the money in a short increment of time, 6 weeks. The money be divided between the states according to a formula based on unemployment rates and housing price declines. Of the $1.5 billion Michigan is getting $154.5 million and only six weeks to come up with plans on how to spend the money. The money can be spent, for example, to help families who can't pay their mortgages because of job losses, unable to refinance because plunging home values have left them "underwater," or to give relief from second mortgage payments.
Three different sets of issues the states can tackle with the funding are outlined according to the biggest set of problems, unemployment, underwater mortgages and second liens. The combination of unemployment and a housing market crisis is a serious problem because homeowners who have lost their jobs used to be able to sell their property. Now that property values have decreased exponentially, the unemployed are left only with foreclosure options or loan modification.
Distressed properties made up 48.1 percent of home purchases in February. This was an increase from the 37.3 percent level recorded as recently as November. Distressed properties include homes that are bank owned or whose market values are below the balance of the homeowner's mortgage. It was also the highest distressed property market share seen since last July.