Homeowners in need of foreclosure prevention assistance may have alternative options from the Hardest Hit Fund, which has been implemented in numerous states across the nation that were particularly troubled by negative equity, unemployment, or those who have seen homeowners simply fall behind on their mortgage payments due to financial difficulties related to economic troubles, employment, or even illness. However, when it comes to the plans that are offered through these state programs, homeowners may have different options depending on where they live and if they qualify for one of these plans.
Yet, many of these states are attempting to offer foreclosure prevention aid to homeowners who are without a job or who are suffering from negative equity and these options often mirror federal Making Home Affordable Program plans as there are some programs that may offer mortgage principal reductions for those who have seen a drop in property value, while others may offer grants or loans to homeowners who are unemployed as a way to keep homeowners in their home for the long term, as even loans through certain HHF programs may be forgiven after a set period of time.
However, there are also some states that are offering assistance for a homeowner’s second lien, in terms of a more affordable options for homeowners who have both a primary and secondary mortgage in place, but also there are some opportunities that homeowners may have if foreclosure is inevitable to receive relocation assistance, which again mirrors aspects of the Home Affordable Foreclosure Alternatives program. Homeowners also need to understand that they will have to contact their state’s housing agency, as well as, work with their mortgage servicer to implement these plans outside of the federal Making Home Affordable initiative.
The Department of the Treasury has compiled a list of states participating in the Hardest Hit Fund, which are those areas where unemployment is still at or above the national average or excessive declines in home property values have been present since the housing market downturn a few years ago. While some of these states are more well-known than others, as California, Nevada, and Arizona have been offered HHF assistance, areas like Georgia, Indiana, and even North and South Carolina also have programs in place available directly from state housing agencies.
However, homeowners need to understand that these programs are not a guarantee, but simply offer an alternative outside of the federal modification plan to address homeowner issues like unemployment or negative equity. Also, not all states may implement similar programs or offer the same type of assistance plans, but again, many are in place to address issues that homeowners may face, related to unemployment or negative equity, in instances where a homeowner may be able to avoid foreclosure and continue to remain in their property if this assistance is given. While homeowners can consult resources like the Treasury website, they may also contact either their mortgage servicer or state housing agency for more information about these plans and how they could be of assistance for individuals facing the loss of their home.