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Arizona Gets $125 Million in Second Mortgage Relief

Second mortgage defaults have been troubling lenders in Western states like Arizona, California and Nevada.  Many borrowers got in over their heads taking out second mortgage loans for home improvements and buying things they could not afford.  As property values dropped second mortgage defaults soared.  Some lenders offered second mortgage modifications and some simply wrote off the losses. Arizona will receive $125 million in federal money, as one of five states that have been hit the hardest by the housing market crash.

The Hardest Hit Fund, created by the Obama Administration, is distributing the money to the Arizona Housing Finance Authority, which will disburse it through three means:
• Financial assistance through principal reductions, mortage rate reductions or term extension programs with the goal of securing permanent loan modifications to pay off second liens in cases where the second mortgage loans is preventing a homeowner from modifying the original first mortgage.
• To distressed homeowners who are either unemployed or underemployed cannot make their second mortgage payments to give them time to find a new job and resume making mortgage payments.

Arizona and the other four states — California, Florida, Nevada and Michigan will be receiving a total of $1.5 billion.  “These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure,” said U.S. Treasury Assistant Secretary for Financial Stability Herbert M. Allison Jr. in a press release.  Five other states will receive about $600 million for housing assistance programs in the near future: North Carolina, Ohio, Oregon, Rhode Island and South Carolina.

Posted in Mortgage News, Mortgage Relief, Second Mortgage Modification, Second Mortgage Updates, second mortgages. Tagged with , .

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