Americans who lost their homes to foreclosing lenders in Phoenix, Arizona were thankfully 20% fewer in April 2010 compared to the month just past. Could it be that the total of almost 4.500 units foreclosed in April compared to the just over 7,500 in March are thanks to HAMP anti-foreclosure efforts? Or is this result, taken together with simultaneously lower pre-foreclosure rates, a harbinger of something else to come?
The Arizona Administration’s plan to inject $125 million of federal funds into the foreclosure stoppage struggle is set to assist over 4,250 local underwater borrowers this year – although this is still a drop in the bucket when compared with total foreclosures for April alone. The program was sent to Treasury Department for rubber-stamping just a week or so ago, and a final conference call is expected to wrap things up tomorrow: the funds could be in the State’s bank account as early as June if things go according to plan.
Key aspects of the Arizona proposal include:
Permanent modifications to mortgages affecting underwater borrowers who can demonstrate an approved hardship such as unemployment or ill health. Provided lenders match the government’s generosity dollar-for-dollar, then the benefit in the form of a reduced outstanding balance could be as high as $100,000 per beneficiary. The State plans to use $92 million of the Federal grant to relieve the pain of over 1,800 of its citizens in this way.
Settlement of around 1,500 second mortgages to enable home owners to qualify for relief on their primary loans – this will absorb a further $7.5 million of Washington’s largess.
A further approximately 1,000 Arizona households will benefit from another $12 million in the form of temporary modification / payment relief assistance that could last as long as 24 months provided they use the time to actively seek employment.
A key condition is that qualifying beneficiaries must be able to prove to State officials that:
Foreclosure is “imminent”
Their primary residences are “modest”
Their incomes are equal to, or below 120% of the area average
They take personal responsibility for previous financial decisions – good and bad
Their current state of financial hardship is the result of unemployment, medical problems, divorce, or the death of a close family member
The rest of the grant (11%) will go on “support and administration costs” such as funding not-for-profit housing counselors and the State’s own Arizona Foreclosure Prevention Hotline on 1-877-448-1211 – that’s not bad in terms of ratios but still a lot of dollars to blot up with the system itself.
If you live in Arizona, and are personally affected by a foreclosure, you’ll be able to apply for relief directly from www.savemyhomeaz.gov .
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