The Obama administration has tried, time and again, to introduce new assistance programs, in effort to assist those caught in the tornado of the foreclosure crisis, and unfortunately, not much has helped. Over a third of the Obama administration’s mortgage modification programs’ roughly 1.2 million borrowers, have left the program.
The nearly 340,000 homeowners who have remained with the program from its inception, have received a permanent loan modification and consistently make their payments on a timely basis.
The Obama administration has recently developed five, state-specific plans to assist homeowners; utilizing a $1.5 billion budget to provide help to the states hurt most by the housing market’s turn for the worst. According to The Treasury Department, the states most recently approved to receive aid from these plans are California, Nevada, Michigan, Arizona and Florida.
The aforementioned states were chosen for assistance as the five saw a 20% drop in home prices. The programs will vary by state and will aid borrowers who have lost jobs and make mortgage payments, those who may have canceled second mortgages, or may have blocked loan modifications.
The state receiving the most funding will be California—approximately $700 million which will go towards helping roughly 45,000+ borrowers. California officials are apparently already asking for “matched contributions” from its lenders, for its programs, which ultimately produce subsidies for unemployed borrowers and homeowners who miss their mortgage payments, as well as seek reductions in these borrowers’ principal balances.
Assistant Treasury Secretary, Herbert Allison said, “These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure.” Since President Obama introduced the state assistance programs back in February, state agencies have developed similar plans to help borrowers who owe a substantial amount more on their properties than they are actually worth.
The newly funded states project the introduction of the plans will help 93,000 homeowners. Florida is receiving $418 million which will assist approximately 12,000+ borrowers. Treasury officials agreed with Florida’s plan to help its unemployed, but rejected a plan to offer legal representation to homeowners facing foreclosure.
Michigan has been approved $155 million to provide assistance to its 17,000 borrowers, 11,000 of whom are presently receiving unemployment benefits. Arizona gets $125 million for its 12,000 borrowers while Nevada will have $103 million for its nearly 5,000.