With all the fanfare surrounding the Making Home Affordable program, it's easy to forget that one of the largest causes of foreclosure remains unaddressed--most lenders refuse to modify or refinance home loans for the unemployed, even when simply refinancing to today's lower rates would make the loan safer. Generally, there are guidelines that require the borrower to have sufficient income to refinance or make a modified payment before being granted a loan modification. So if you lose your job you are probably out of luck--in six months when you get a new one, you may have already lost your home to foreclosure. Well, Congress is trying to help you now.

Reps. Barney Frank, Chaka Fattah, Elijah Cummings, and Sen. Jack Reed have introduced bills to offer loans to the unemployed. Representative Frank's TARP for Main Street bill would provide $2 billion in TARP money to make loans that pay mortgages for those who don't qualify for other assistance. Fattah would set up a program that resembles Pennsylvania's Homeowners Emergency Mortgage Assistance Program (HEMAP), which provides assistance for the unemployed until they find work or for 24-36 months. All would get funds directly to homeowners to get their mortgages paid.

A new loan program could use funds already earmarked for foreclosure prevention to stop mortgage defaults in the unemployed. With TARP funds being funneled to the banks, foreclosures continue at record pace, and they ARE preventable. When the economy recovers (as many experts think it's already starting to do), most jobless workers will be hired again and able to resume their mortgage payments. Timely bridge loans could keep them out of default until the borrowers get back to work or for some set time period. Even some portion of the $75 billion set aside for Making Home Affordable could bring many homeowners current and not leave them at the mercy of mortgage servicers who can't or won't help them.

Such a program would be much more efficient than the time-consuming loan modification program. It's not hard to prove that you're unemployed and to show what your mortgage payment is. You could be automatically be approved for a loan that would pay any mortgage above 31% of the household income (the target amount in Making Home Affordable modifications). The Treasury would make your mortgage payments and keep you out of default.

Loans would be repayable with interest, but not until your income was sufficient to make that feasible. Pennsylvania's plan has actually made money for the state--about $10 million since its inception.

Nothing else has worked. Very little of the bailout has actually helped homeowners. It's time to bypass the banks, pay people's mortgages directly, and halt the home losses that are destroying our security and our economy.