Indianapolis FHLB Launches Foreclosure Assistance Program
The Federal Home Loan Bank of Indianapolis announced on Friday a new $100 million lending initiative, HomeRetain, to help FHLBI financial institution members assist families facing foreclosure. In a press statement, the FHLBI said that HomeRetain will split available funds between members in Indiana and Michigan, and that funds may be used to modify or refinance mortgages for primary residences in any state in which a member does business. â€œThe increase in home foreclosures and mortgage delinquencies is having a significant effect on many households and neighborhoods,â€? said Milton Miller, President and CEO of the FHLBI. â€œEveryone loses when there's a foreclosure â€“ the homeowner, the lender, the community. We anticipate that HomeRetain can help resolve some of these situations without foreclosure.â€? The HomeRetain program is similar to one offered by the Home Loan Bank of Cincinnati, and American Banker reports that the Indy FHLB expects its program will help up to 500 borrowers. No single member institution can borrow more than $15 million of the funds allocated for HomeRetain. Mortgages financed with HomeRetain funds can be made to homeowners earning 115 percent or less of an area's median income. Homeowners may not take any cash out of the modification or refinancing, and they must complete an approved homeowner counseling program, the bank said. In an interveiw with American Banker, FHLBI CEO Milton Miller suggested the program targeted community banks, many of whom still own the mortgages they originated and could therefore more easily undertake modification efforts under the HomeRetain program. The program runs through June, and Miller said the bank will reassess the program at that time to "see how it works in practice."