Obama OKs $600m in Foreclosure Prevention for Five Hardest Hit States
The Obama Administration approved the plans of five states to use $600m of foreclosure-prevention aid provided through the Hardest Hit Fund. The funds will support local initiatives to aid distressed borrowers in North Carolina, Ohio, Oregon, Rhode Island and South Carolina, which have high population percentages living in areas of economic distress due to unemployment. State Housing Finance Agencies (HFAs) may begin using the funds today. "These states [which were approved in the second round of funding] have designed targeted programs with the potential to make a real difference in the lives of homeowners struggling to make their mortgage payments because of unemployment," said Treasury Department assistant secretary for financial stability Herb Allison. "While the Obama Administration has already taken critical action to strengthen the housing market and create jobs, we are committed to doing everything we can to immediately help those who are hurting the most during these tough times." The first five states to receive Hardest Hit funding were Arizona, California, Florida, Michigan and Nevada. The proposals approved today include programs to expand options for struggling, unemployed borrowers, as well as programs to address first and second liens, facilitate short sales and deeds-in-lieu of foreclosure, and assist in past-due payments. The state HFAs estimate 50,000 borrowers will benefit from the aid. North Carolina is approved to use $159m, Ohio is approved to use $172m, Oregon is approved for $88m, Rhode Island is approved to use $43m and South Carolina is approved for $138m. The five HFAs submitted their proposals to the Treasury on June 1. Later that month, the administration signed off on state plans to use $1.5bn of Hardest Hit Funds. Write to Diana Golobay.