Illinois Governor Pat Quinn recently announced the new Mortgage Resolution Fund (MRF) created to permanently modify loans to affordable amounts.[IMAGE]
The MRF is being funded with $100 million from the state of Illinois and $445.7 million from the Hardest Hit Fund Ã¢â‚¬" a fund established by the Obama Administration in 2010 to help families in markets hardest hit by the housing and economic crisis.
""The Hardest Hit Fund helps Illinois and other states that were most affected by the housing market downturn by providing the funds to implement innovative ideas to help struggling homeowners"" said Treasury Assistant Secretary for Financial Stability Tim Massad. ""I am glad to see that Illinois is developing a creative program to assist homeowners with underwater mortgages.""
Under the MRF, delinquent loans will be purchased from lenders at present value and modified according to current home values.
When the loan begins performing again, the funds will be recycled into the program to purchase more delinquent loans.
""Illinois is committed to addressing the foreclosure crisis with strategic financial solutions,"" Quinn said. ""With this unique coalition of housing leaders, we are able to stretch this federal resource further with the involvement of private partners and help more people stay in their homes.""
The MRF includes both public and private sector participants, including Mercy Portfolio Services and Mercy Housing, Inc., Enterprise Community Partners, Inc., the Housing Partnership Network, and the National Community Stabilization Trust.
""We thank Governor Quinn for positioning Illinois as a national leader, and we are proud to spearhead operations for this important public-private effort that addresses the problem of distressed mortgages,"" said William Goldsmith, MRF president.
If successful, the MRF program may be expanded to other areas of the state.
""The program's financial strategy elevates it to something that can become a model for other states,"" said Robert Grossinger, vice president of National Community Foreclosure Response Initiative, Enterprise Community Partners, Inc.