Obama Expands ‘Hardest Hit’ Foreclosure Help by $600M

With a second-round infusion of $600 million, the Obama Administration today extended another foreclosure rescue program it launched just last month that targets economically “hardest hit” housing markets in certain states.
Today’s announced expansion of the Housing Finance Agency’s Hardest Hit Fund will cover “local areas of concentrated economic distress” where the unemployment rate exceeded 12 percent in 2009. Those areas are in North Carolina, Ohio, Oregon, Rhode Island and South Carolina.
Less than 15 percent of the U.S. population lives in these high-unemployment counties, Treasury said.
The HFA’s first round, announced Feb. 19, allocated $1.5 billion in assistance to five states with home price declines greater than 20 percent: California, Arizona, Nevada, Florida and Michigan.
HFAs are independent entities that operate under the direction of a board of directors appointed by each state’s governor. The “hardest hit” foreclosure assistance will somewhat modify the work of these state agencies with the traditional function of providing affordable housing to first-time or low-income buyers.
“Responsible families across the country have found themselves unable to pay their mortgages due to unemployment or underemployment,” Treasury said in statement.
The funds for both rounds are to be re-directed from the government’s primary bailout program, the Troubled Asset Relief Program, TARP. 
HFAs in states qualifying for the second Hardest Hit Fund will be required to submit plans to Treasury for review before becoming eligible for funding.
The state agencies can use the additional aid to help troubled homeowners move into the government’s mortgage reduction program, Home Affordable Modification Program, HAMP.
Last week, Obama announced an expansion of HAMP to include limited mortgage principal writedowns and up to 6 months of reduced mortgage payments for some unemployed homeowners.

J. Lipsky

Hello, I am John, born in Cedar Rapids, but lived a lot of years in Latin America. I am an economist and have specialized in credit and debt. Originally sovereign debt, but later on, in credit score management and debt consolidation. I write for many publications. Here in eCreditDaily, I write about credit, second chance banking, and debt. I also write for other websites and bulletins about inflation and country risk.

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