Professional Home Staging and Photography Blog: Mortgage foreclosure assistance authorized for worst-hit states

Mortgage foreclosure assistance authorized for worst-hit states

Silverstone Ranch, Las Vegas, NVAs the housing sector kept sucking for more oxygen, Washington announced back in February the Hardest Hit Fund worth $1.5 billion that was designed to help states in serious housing peril and asked them at the time, as a condition to get a slice of the money, to submit creative programs that would lend a hand to homeowners struggling with mortgage payments. The plans from Arizona, California, Florida, Michigan and Nevada have now been okayed by the Treasury and the assigned funds are ready to begin flowing to the states' Housing Finance Agencies, or HFA, tasked to administer their use.

California drew the largest share at $699.6 million, Florida got $418 million, Michigan $154.5 million, Arizona $125.1 million and Nevada $102.8 million. Apparently the split was based largely on population size, which certainly is one way to do it.

A fairer method might have been to look at the current mortgage foreclosure rate in each state, in which case Nevada - with Las Vegas as its much-pummeled real estate meltdown epicenter - would have picked up a bigger portion of the proceeds. Negative equity measure, or being underwater, would be another metric that could have been used here. Again, Nevada would have ranked right up there for more funds than what it now received.

Each state presented its own innovative program for mortgage borrower relief, but a few predictable items appear on everyone's list. The most prevalent one is principal reduction, something that all address in a variety of ways. It clearly is the key in any plan, government or private, to stabilize housing markets from Florida to Nevada and beyond. The Obama Administration is putting increasing emphasis on it, but its actions need more support from mortgage lenders who so far have been reluctant to do much about it.

Unemployed homeowners get help to meet their mortgage obligations while looking for work is another popular feature. As is the assistance to handle the complexities of a second mortgage that may be hindering loan modification or any other real estate transaction, like a short sale.

Hardest Hit Fund will have a second phase later this year, covering the next tier of states lured into the now infamous mortgage and real estate backwater. It will bring some relief to a still festering housing situation, but for a real impact to be achieved the private sector needs to step up to the plate with a hot bat.



Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 8 commentsEsko Kiuru • June 24 2010 04:55PM


I couldn't agree with you more!  I was surprised to see that Nevada and Arizona received so much less! I sell Real Estate here in Jupiter and Port St. Lucie, FL and I was definitely under the impression that Arizona and Nevada ranked right up there with us as being hardest hit. 

Posted by Sharyn Krim (Keller Williams Realty) almost 9 years ago

102 million broken down over all those foreclosures, you wonder how many people will actually be saved by this relief.  Good post, thank you for the information.

Posted by Jason M. Keith, Equal Housing Lender (Caliber Home Loans) almost 9 years ago

I can't figure out why we would not get equal share compared to our big sister west of us. Although CA residents have been complaining they are even more hard hit than we are lately. I would prefer NV needed none. Wouldn't that be refreshing?

Posted by Kate Kate almost 9 years ago

Esko I remember you blogging about this a few months ago.  You guys might not have gotten all the money you wanted, but 102.8 million is nothing to sneeze at.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 9 years ago


Who said it that life is not fair? Anyway, Washington has spoken. 

Posted by Esko Kiuru almost 9 years ago


Exactly, Southern Nevadans don't see much of that money because there are so many in need.

Posted by Esko Kiuru almost 9 years ago


A few areas in California are as bad as Vegas I understand, so they have a bit of an argument there. But, ...?

Posted by Esko Kiuru almost 9 years ago


It's a start, hopefully local officials are asking for more.

Posted by Esko Kiuru almost 9 years ago