Providing Relief To States Hardest Hit By Foreclosures
In 2010, The Obama Administration announced the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)
. Also known as the Hardest Hit Fund, $7.6 billion worth of funds was promised to those homeowners that were struggling with their mortgage payments. The funds were provided to ensure that it would stabilize the local housing markets and complement other programs that were being run by the federal and state governments for helping the distressed homeowners.
The exact nature of HHF is slightly different from state to another. The Fund however covers all of the following salient points that include:
* It gives monetary assistance for homeowners that are employed as well as unemployed for making the mortgage payments.
* The principal amount of the mortgage loan can also be lowered to ensure that the mortgage payments for the homeowner become more affordable.
* Funds are also given for eliminating second liens if the homeowner should have it, on their home.
* The program also gives monetary help to those homeowners that are finding it difficult to make the mortgage payments even after modification of their loans. In such cases, funding is provided to them to make the transition to homes that are more affordable.
The 18 states where these funds have been allocated are Alabama, Arizona, California, Florida Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington D.C
To know the exact plan of each state, homeowners can visit http://www.treasury.gov/initiatives/financial-stability/programs/housing-programs/hhf/Pages/default.aspx that lists the plans of the states for the hardest hit fund. As of January 2012, it has been seen that the foreclosure figures did come down in comparison with the figures of the previous year during the same time.
Problem with the program
Most homeowners are still unaware of the federally administered programs that are still available and havent taken full advantage of the plans that are meant for the distressed homeowners in the 18 states. For example The Treasury Department has noted that California was provided with $2 federal aid for this crisis, out of which only $38 million was actually used. So, even though funds are still available, they havent been used properly by the homeowners since there is a lack of information and knowledge. This has been the same story in most states.
In some states, the tide is turning and the number of foreclosures is on a decline as compared to other states. Many states are also struggling with high unemployment rates as the recession is coming to a halt. For those families, that could see a possible foreclosure, its important that they should contact their lenders as soon as possible.
Options apart from federal programs to stop foreclosure
Other options that is also available for avoiding foreclosure is declaring bankruptcy under Chapter 7 or Chapter 13. While Chapter 7 is a temporary measure for dealing with foreclosure, Chapter 13 is a permanent measure to deal with foreclosure.
by: Julie Thompson
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