New York (CNNMoney.com) - Unemployed? Owe more on your mortgage than your home is worth? Your state might one day pay your mortgage.
Giving people free money to cover their home loans is just one of the radical ways that four states - Florida, Michigan, California and Arizona - plan to use $1.4 billion the Obama administration is sending their way to help the unemployed and underwater avoid foreclosure.
Many consumer advocates have said the government should help cover the payments of these troubled homeowners, lest the mortgage crisis continue spinning out of control and dragging down everyone's property values. But other housing experts warn that paying off loans creates a moral hazard and could actually dissuade people from looking for work.
Innovative programs, however, are exactly what the administration was hoping for when it unveiled the Hardest Hit Fund initiative in February. Officials are looking to help the unemployed and underwater, who are now at the heart of the crisis. Despite the administration's best efforts to stabilize the market, home prices are still sliding and foreclosure filings are at record highs.