Arizona – Hardest Hit Fund – Innovative Foreclosure Prevention
President Obama’s Hardest Hit Fund has allocated 125 million dollars to fund additional foreclosure prevention and homeowner assistance in the state of Arizona. This represents a little less the 10% of the total 1.5 billion dollars that was given to the five states combined.
The Housing Finance Agencies of Arizona will be responsible for the allocation and use of the assistance funding. They have planed a innovative and promising plan of action to combat the mortgage hardship and foreclosure crisis that has hit the state so hard over the past couple years.
Details of the Arizona foreclosure assistance programs funded by the first wave of funding from the Hardest Hit Fund are discussed here in detail.
Arizona and Foreclosure Hardship
Arizona has been hit hard by the housing crisis as is evident in the 125,000 foreclosures that have taken place there since 2009. Close to 70% of these foreclosures were in Phoenix.
This is a devastating number for any city but especially for a city in a state that has little else to speak of in a economic sense. Arizona as a state depends heavily on the economic activity that phoenix traditionally produces. The numbers pertaining to foreclosure and mortgage default in Phoenix is more then alarming.
The state has had to deal with the typical causes of hardship such as job loss, mortgage resets, inflated home sale prices and the like. However they have also dealt with a less common cause of foreclosure.
The homeowners of Arizona have in many cases over paid for the homes they purchased and thus are underwater. Because the home values are dropping steadily as a rock the situation gets worst. Many homeowners have just stopped paying their mortgage because the prices have just gotten so and there mortgage so deep in the red.
This trend of giving up on the mortgage has just made things worst.
Arizona Foreclosure Assistance Plan
Arizona has come up with a great foreclosure prevention plan to utilize the 125 million dollars of Hardest Hit Funding from the Making Home Affordable Plan.
The Arizona Foreclosure Assistance Program is a 3 Component Plan
Temporary Mortgage Payment Relief for the Unemployed
- Folks that have been laid off and are now unemployed but still searching for work will be given the opportunity to receive up to two years of mortgage payment coverage.
- For homeowners that are at least a couple months behind will have the opportunity to apply for a loan modification to their existing mortgage that will reduce interest, extend term, and forgive principle until a monthly payment less then 31 % of the monthly gross income is achieved.
Second Mortgage Settlement and Principle Reduction
- In many cases a homeowner is unable to obtain a mortgage modification because of a second mortgage on the home. In cases where this is the only thing clogging up the path to loan modification the homeowner will have the opportunity to eliminate the 2nd mortgage balance and principle.
Qualifying Terms for Arizona foreclosure Prevention Assistance
- No multi property owners
A homeowner who owns vacation properties and or investment properties an addition to a primary residence will not be eligible
- No financially irresponsible homeowners
If a homeowner has done this to themselves in a financial sense then the foreclosure help resources will not be used for their benefit. They will not be eligible.
- Must be only and primary residence
these funds will only be used for a primary residence home.
- Financial hardship must be present
The homeowner must have incurred a financial hardship
- Foreclosure is otherwise inevitable
This is not for those who just got fed up with underwater there mortgage has gotten.
Less then 5,000 homeowners are expected to qualify and receive assistance from these programs and foreclosure aid funding.