Community Developments Investments (July 2015)
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Hardest Hit Fund: State Programs to Improve Loan Modification Sustainability and Stabilize Communities
States are implementing their individual Hardest Hit Fund programs in innovative ways. By working closely with state agencies, banks can identify solutions that may help borrowers remain in their homes.This report describes the innovative ways state housing agencies are using funds from the U.S. Department of the Treasury to help homeowners in areas still struggling to recover from the housing crisis.
The Treasury Department's Hardest Hit Fund is unique among federally funded foreclosure prevention programs in that it allows each participating state housing finance agency to design and implement programs based on the distinct challenges of its local housing markets.
Kentucky Housing Corporation focuses its state's Hardest Hit Fund relief on temporary mortgage assistance for unemployed and underemployed homeowners, along with reinstatement assistance to help bring borrowers current on their mortgages.
California's principal reduction program is designed to be as flexible as possible to meet the needs of both homeowners and lenders under numerous scenarios. Lenders and investors routinely use the program to help struggling homeowners in their portfolios get the help they need.
Florida Housing Finance Corporation developed an innovative "buy and modify" principal reduction program using Hardest Hit Fund assistance. Working with a private partner that acquires nonperforming mortgage notes, the program provides assistance to reduce the principal balance of qualified homeowners' loans and improve the viability of loan modifications.
One of the challenges Hardest Hit Fund administrators grapple with is how to efficiently identify eligible homeowners who may be interested in participating in a state's Hardest Hit Fund program. The North Carolina Housing Finance Agency's emphasis has been direct outreach to homeowners who are potentially eligible.
A look at the provisions in Community Reinvestment Act regulations and guidance that banks should keep in mind when developing policies and initiatives to address foreclosures, property disposition, and community stabilization.
The ReClaim Project contributes to neighborhood revitalization efforts in markets still recovering from the housing crisis by moving low-value, pre-foreclosure properties toward community-sensitive resolutions.
This publication is part of:
Collection: Community Developments Investments
Deputy Comptroller
Barry Wides
Editorial Staff
Michael Carrier
Sharon Canavan
Jessica Scully
Lily Dow
Dan Gibbard
Design Staff
Cheryle Robison
For questions or comments, call (202) 649-6420 or email communityaffairs@occ.treas.gov. This and previous editions are available on the OCC's website at www.occ.gov.
Disclaimer
Articles by non-OCC authors represent the authors' own views and not necessarily the views of the OCC.
Deputy Comptroller
Barry Wides
Editorial Staff
Ted Wartell
Bill Reeves
David Black
Dan Gibbard
Design Staff
Rick Shacklette
Cheryle Robison
For questions or comments, call (202) 649-6420 or email communityaffairs@occ.treas.gov. This and previous editions are available on the OCC's website at www.occ.gov.
Disclaimer
Articles by non-OCC authors represent the authors' own views and not necessarily the views of the OCC.