The Office of the Comptroller Currency (OCC) is focusing on sustainable loan modifications and reducing foreclosures in the latest edition of the Community Developments Investments electronic newsletter, according to an announcement from the OCC.
This edition of the newsletter, titled "Hardest Hit Fund: State Programs to Improve Loan Modification Sustainability and Stabilize Communities," is part of a group of resources made available to national banks and federal savings associations seeking information on foreclosure prevention and neighborhood stabilization. The resources can be accessed through the OCC's website.
The latest edition of the newsletter provides examples of how state financing agencies are implementing the Hardest Hit Fund (HHF) Program, which was established as part of the Troubled Asset Relief Program (TARP) by President Obama in February 2010 to provide targeted aid to families in states hit hard by the economic and housing financial crisis. The HHF Program has evolved from a $1.5 billion initiative in five states to a $7.6 billion initiative that includes 18 states plus the District of Columbia.
The Hardest Hit Fund initiative provides funding to programs that provide locally-tailored foreclosure prevention solutions to the areas most affected by home price declines and high unemployment. Examples of implementing Hardest Hit Funds in affected areas described in the newsletter include funding programs that provide underwater borrowers at risk of foreclosure with principal reduction in conjunction with loan modification, providing temporary mortgage assistance for borrowers who are unemployed, assistance to facilitate short sales, or money to pay off second liens.
"There is no single solution for increasing sustainable loan modifications and reducing foreclosures," Comptroller of the Currency Thomas J. Curry said. "This newsletter highlights one of the major federal initiatives, the Hardest Hit Fund, and features some of the collaborative programs that have allowed state housing finance agencies to implement solutions tailored to each area’s situation."
In an article for the newsletter titled "Hardest Hit Fund Provides Locally Tailored Solutions for Struggling Homeowners," U.S. Department of Treasury Director of the Hardest Hit Fund Program Erin Quinn said that as of March 2015, almost 230,000 homeowners had received a combined $4.7 billion worth of assistance from the HHF Program, with an additional $300 million commended under various blight elimination programs. According to Quinn, mortgage payment and reinstatement assistance programs, under which housing finance agencies make monthly payments to the mortgagee on behalf of the borrower, have made up the vast majority of assistance provided.
Also described in the newsletter are efforts to address low-value abandoned properties in a way that complements state housing finance agencies' work, and how foreclosure prevention efforts and community stabilization activities may qualify to be considered by a bank in a Community Reinvestment Act examination.
Click here to see a copy of the electronic newsletter.