AZ Homeowners’ Assistance Program on Track to Fail

Seems the Arizona Housing Department’s hardest-hit-fund program still isn’t doing much to help homeowners fend off foreclosure.

Through the first quarter of 2011, a period when Arizona ranked second in the nation for the number of foreclosures, only 10 homeowners received assistance under the Save Our Home AZ program.

The program is supposed to be the Arizona Department of Housing’s method to distribute its $125 million federal allocation from the Hardest Hit Fund aimed at helping homeowners in the 10 states hardest hit by foreclosures.

The stated intention is to” provide assistance of up to $50,000 to qualified homeowners to create an affordable and sustainable mortgage payment through a permanent principal reduction modification.” The program is supposed to be helping 4,000 homeowners.

So, how’s it doing so far? How many of the 4,000 have gotten assistance? Just the 10. One, zero. Ten. Yes, since the program’s inception in September 2010, only 10 homeowners have been helped.

Only one of those successful transactions has been a principal reduction, which economists, consumer advocates and some financial industry executives say will be necessary to end the foreclosure free-fall and stabilize the housing market. (Principal reduction might even end up part of a settlement being negotiated between the big five U.S. mortgage loan servicers and a coalition of state attorneys general.)

In addition to the glaring limitations of the program, which I wrote about back in December 2010, it seems the program only works if banks opt in. The money is there, but banks have to agree to participate. So far, in Arizona, it seems only Bank of America has done so. My servicer, Wells Fargo, apparently opted out.

If Arizona really works hard, maybe Save Our Home AZ can be even more dismal a failure than the federal HAMP loan modification program.

Update 9/12/2011:
As of the end of June 2011, nine months after its inception, Save Our Home Arizona has only helped 78 Arizonans avoid foreclosure. Only three of those transactions were principal reductions.

At this rate, it will take 38.5 years for the program to meet its stated goal of helping 4,000 homeowners avoid foreclosure in this state that is one of the worst victims of the mortgage meltdown. Absurd!

Update 3/2012: As further proof this program is pie in the sky, as of Feb. 24 only a total of 16 modifications have been granted. In a year and a half. In a state consistently ranked in the top three hardest hit by foreclosures. Absurd.

Update 4/2012: Looks like Arizona isn’t the only state doing a dismal job disbursing the “Hardest Hit Fund” dollars to homeowners. A total of 3% of the fund has helped people save their homes from the banksters’ foreclosure feeding frenzy. Another farce, brought to you by your government.
Treasury Faulted in Effort to Relieve Homeowners

6 thoughts on “AZ Homeowners’ Assistance Program on Track to Fail

  1. I am actually one of the few people that got on that program… We have been on it about 3 months now, I think this was intentionally created to help pay off banks…all it is doing for us is delaying the foreclosure, we fell about 3-4 months behind when this program came in, and boa just sent me a letter saying all that is going to be due as soon as the program is over. I might as well walk away from my house now.

    • Hi Will,
      Sadly, I think you’re absolutely right that these “hardest hit” programs were just another way for banks to defer a few more foreclosures until later. It takes a long time to forge all that paperwork, after all!

      Were you one of the few who got a principal reduction from the AZ program? I suspected those would turn out to be deferrals instead of actual reductions, but no data to support that yet.

      Sorry for your troubles and that the program you hoped would help turned out to be just another scam. I encourage you to write to the AZ Attorney General about your experience … I understand there might be a investigation underway regarding these “hardest-hit” programs.

      Good Luck!

  2. NC’s program mishandling is CAUSING foreclosure — same story I read in Michigan-

    McArdle is not willing to make NC take responsibility — putting me in worse position – far worse – than I was before. If mistakes were made, and they do admit they made them at first – then they blamed ME when they found what their mistakes would cost–

    why don’t THEY pay for these mistakes? Why is there no oversight?

  3. No, there is no oversight. These “home preservation” programs all seem to have been conceived by people who believe a corrupt industry is best left to police itself when it comes to restructuring loans. The federal and state government officials owe there election campaigns to the big banks, so they don’t help. Regulatory agencies seem to be cronies of the big banks, so no help there, either. And the legal mechanism is skewed in favor of the banks, as well.
    Utter Nonsense!

  4. Pingback: Only 3% of $$ Has Helped Hardest Hit Homeowners | Is Mortgage Modification a Scam?

  5. Pingback: SIGTARP: Banks Fail Miserably at HAMP, Treasury Does Pretty Much Nothing |

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