Hardest Hit Funds is a treasury Department funded program which is run at a state level. The program has evolved over time to now include: foreclosure prevention (by paying off the arrearage account), principle reduction, monthly mortgage payment assistance, blight elimination, elderly and unemployment to programs and down payment assistance programs.

All of these program benefit the home owner AND the note owner. For example if a delinquent borrower lost a job 2 years ago but is now working and able to make their monthly payment isn’t making those payment because, and they are correct, just making the payment doesn’t prevent a foreclosure as the note holder can foreclose because of all the missed back payments, penalties and interest (arrearage account), the HHF program would pay off the arrearage account. The borrower is helped and the payoff amount goes lump sum into the note holder’s (investors) account. I have seen many deals where they payoff was more than the amount that the investor paid for the delinquent note.

There were many changes to that program last month:

1. Illinois received approval to reallocate funds from their Home Preservation Program and Blight Reduction Program to their administrative expense allocation.

2. Michigan received approval to introduce a new down payment assistance program which will provide assistance to qualified borrowers purchasing homes in targeted areas that continue to demonstrate housing market distress, and to reduce their administrative expense allocation.

3. Mississippi received approval to reallocate funds from their administrative expense allocation to their Home Saver Program.

4. New Jersey received approval to reallocate funds from their HomeKeeper (monthly mortgage payment assistance) program into their Home Saver (principal reduction) and HomeSeeker (down payment assistance) programs, and to move funds between administrative expense line items.

5. Ohio received approval to reallocate Mortgage Payment Assistance funds to their Rescue Payment Assistance Program.

6. Rhode Island received approval to reallocate remaining funds from their RI Refinance Program into their Down Payment Assistance Program.

I look at this information every month in the report section (left hand side of page for link) of

The treasury website https://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/default.aspx. The report is the monthly report to congress.

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