Mortgage

Federal approval for state mortgage reduction packages is ramped up

Oklahoma, Rhode Island, Tennessee, and Pennsylvania are the last states to announce government approval for their homeowner assistance programs.

Following the passage of the nearly $ 10 billion fund under the American Rescue Plan Act, it will be distributed by the state governments that submitted proposals to the Treasury Department this spring and summer.

On Monday, Oklahoma, Rhode Island, and Tennessee all unveiled their mortgage assistance plans, with the application process already open in each state.

In Rhode Island, several state officials praised the state's launch of the state's $ 50 million aid package, which provides up to $ 50,000 for each eligible applicant. Senior state Senator Jack Reed helped set up the Homeowner Assistance Fund in Washington last spring.

"This is yet another example of the federal government giving states the resources to manage the effects of the pandemic – in this case, averting further problems in our already strained housing market," Reed said in a press release. "Getting that money out the door quickly is essential if we are to help families, neighborhoods and communities."

Tennessee also announced that its $ 168 million package, approved by the Treasury Department last week, is open to eligible borrowers. The funding provides volunteer state residents up to $ 40,000 per household to help them eliminate or reduce overdue payments and other overdue housing costs.

Oklahoma, which received its plan approval just before Christmas, also unveiled a just over $ 87 million package on Monday, according to a spokesman for the Oklahoma Housing Finance Agency. The grant program will provide up to $ 20,000 in mortgage relief for homeowners in Oklahoma.

Last Thursday, Pennsylvania Governor Tom Wolf announced that his state had received Treasury Department approval for a $ 350 million homeowner package. Pennsylvania borrowers can apply starting February 1, with mortgage recovery aid, mortgage prepayment, and home rental and utility assistance assistance available.

“The Home Ownership Fund will prioritize individuals and families in greatest need, as well as the socially disadvantaged. I am grateful that the US Treasury Department approved the Pennsylvania plan, ”said Governor Wolf.

Financial assistance, available through the Homeowner Assistance Fund, consists of payouts made directly to mortgage service providers or other outside clearing agencies on behalf of borrowers in difficulty. The applications must have got into a financial emergency after January 21, 2020, which has led to a significant loss of income, and must not exceed the income requirements, which vary from state to state.

In New York, which received government approval of its $ 540 million HAF plan last month, Attorney General Letitia James issued a multi-lingual consumer warning informing of potential fraud attempts to exploit the fund. Previously, in December, she warned service providers that they must ensure customers are provided with all available loss mitigation options before federal grants can be applied for.

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