Wednesday, August 11, 2010
Tennessee To Receive $81 Million To Prevent Foreclosures
Peter Urban of the Gannett Washington Bureau
Tennessee will receive $81.1 million to help struggling homeowners avoid foreclosures as part of a $3 billion assistance program announced Wednesday by the Obama administration.
The Treasury Department is sending $2 billion in Troubled Asset Relief Program funds to states with high unemployment that would be used to provide temporary help to unemployed homeowners with their mortgage payments. HUD also announced a separate $1 billion program that would build on Treasury’s efforts.
“Together, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country," said Bill Apgar, HUD Senior Advisor for Mortgage Finance.
Tennessee’s unemployment rate for June was 10.1 percent, compared to 9.5 percent nationally. RealtyTrac, which follows foreclosure statistics, reported that Tennessee had 3,981 properties with foreclosure filings in June, a 2 percent increase from May 2010, and a 15 percent decline from June 2009.
The Treasury Department will divide the $2 billion, based on population, among 17 states and the District of Columbia where annual unemployment rates were above the national average for 2009. Two prior rounds of so-called "hardest hit" funding — totaling $2.1 billion — went to 10 states with the highest unemployment and foreclosure rates.
To tap into this money, the Tennessee Housing Development Agency must submit a proposal to the U.S. Treasury Department by Sept. 1.
In 2008 the agency obtained funding for a counseling program to help Tennesseans struggling with their mortgages, said Executive Director Ted Fellman.
“Counseling is valuable, but if there is no income, the mortgage payment can’t be made. The Hardest Hit Fund may be able to help them hold on to their homes until they can be re-employed,” Fellman said.
Fellman said the agency would study the programs in place in other states. Oregon, one of the states whose plans were approved last week, will use its funds for loan modifications, and to help struggling homeowners make mortgage payments and to catch up on past-due amounts and penalties.
The HUD funds, which were included in the recently enacted Dodd-Frank financial reform bill, would provide up to $50,000 in bridge loans to eligible unemployed homeowners who are behind in their mortgage payments.
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