R.I., Oregon Outline HFA Plans

Written by John Clapp
on June 04, 2010 No Comments
Categories : Mortgage Servicing

ousing finance agencies (HFAs) had until this past Tuesday to submit proposals for how they would use federal funding to combat foreclosures in their states. The U.S. Treasury Department's deadline for proposals under the second round of its HFA Hardest-Hit Fund expired June 1, with at least two state HFAs publicly detailing their proposed foreclosure relief plans. The second round of the HFA Hardest-Hit Fund, [link=http://www.mortgageorb.com/e107_plugins/content/content.php?content.5582]announced late March[/link], includes up to $600 million in total funding for state HFAs in North Carolina, South Carolina, Ohio, Oregon and Rhode Island. On Wednesday, [link=http://www.rhodeislandhousing.org/sp.cfm?pageid=861]Rhode Island Housing[/link], whose Treasury allocation is capped at $43 million, announced that it had submitted its proposal to the Treasury in advance of the June 1 deadline. The organization's plan targets $6,000 of financial assistance per household (and up to $8,500 in some cases), for a total of about 5,000 households. In order to qualify for the funds, homeowners will have to meet guidelines for hardship and income levels. Rhode Island Housing proposes using the funds to enable borrowers to qualify for a modification under the Home Affordable Modification Program (HAMP); to help borrowers and local, non-HAMP lenders achieve workouts; to provide ‘temporary and immediate’ assistance to borrowers who have suffered a financial setback; and to facilitate short sales or deeds-in-lieu (DIL) of foreclosure. The proposal also includes a number of sub-initiatives designed to provide aid to seniors, flood victims and owners of multifamily homes. Oregon Housing and Community Services, which is slated to receive up to $88 million under the second-round HFA Hardest-Hit Fund, has also [link=http://www.oregonhomeownerhelp.org/OHCS/Recovery/pdfs/HHF_Proposal.pdf]published details[/link] about its program proposal. According to a summary obtained by MortgageOrb, the is designed to serve at least 6,300 struggling borrowers. The agency outlined the following five programs, which it says will work either as stand-alone options or in concert: [list]Loan Modification Assistance – This program would provide a one-time contribution of funds, up to $10,000, to borrowers who are in the process of obtaining a loan modification. The funds may be used to reduce outstanding principal balance, pay delinquent escrow or ensure a positive net present value test result under HAMP or other modification programs.*Mortgage Payment Assistance – Geared toward unemployed or underemployed borrowers, or borrowers who have experienced a loss of income, this program would provide up to six months of payment assistance with a required 1-to-1 match from the investor for a total anticipated benefit of 12 months. The Mortgage Payment Assistance would pay up to $1,400 per month, for a total capped benefit of $8,400.*Loan Preservation Assistance -Funds provided under the program would help borrowers pay for fees incurred during a period of unemployment or financial distress. Recipients, whose eligibility would be determined by counselors and staff from the Oregon Homeownership Stabilization Initiative, would be able to receive up to $20,000.*Transitional Assistance – This program would work in conjunction with servicers' short-sale and DIL programs, providing up to $3,000 per borrower on a one-time basis.*Loan Refinancing Assistance – The last leg in the Oregon proposal is a pilot project that targets two counties – Deschutes County and Jackson County – where home values have dropped by more than 25% since their peak. According to the agency's outline, Loan Refinancing Assistance would ‘make resources available, on a competitive basis, to mission-driven organizations that will buy the homes or mortgages from lenders at the current market value and then renegotiate and refinance with the homeowners.'[/list] Inquiries to the other three agencies eligible for funding under the HFA Hardest-Hit Fund's second round were not immediately ret

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